This paper solves a liquidation problem for an agent with a preference consistent with the prospect theory of Kahneman and Tversky (1979). According to these preferences, the agent’s value function depends on his wealth change relative to a reference point, around which the agent is more sensitive to losses than...
High level deal-making can be an arduous task, so negotiators often bring in a mediator. But there are problems with human mediators: you never know for sure whether they're unbiased, whether they might reveal confidential information by accident, or whether they're fully competent to mediate the negotiation. But there's hope:...