Negotiation: fixed pie

       Seller's                    Buyer's
      reservation                reservation
        price                       price
          |                           |
          |                           |
          V                           V
--------------------------------------------------

``Trades would not take place unless it were advantageous to the parties concerned. Of course, it is better to strike as good a bargain as one's bargaining position permits. The worst outcome is when, by overreaching greed, no bargain is struck, and a trade that could have been advantageous to both parties does not come off at all.'' (B. Franklin)

Division of utility

Important idea: Pareto optimality

Edgeworth box

Mythical fixed pie

Don't look at this until we do the experiment

Results of repeated trials

Fair division