“When two parties bargain over the division of a pie there are two
conflicting considerations: cooperation is required if the pie is to be created
in the first place. However, a degree of competition is unavoidable, the
larger the share conferred on one party the smaller must be the share given
to the other party.” Use the Nash bargaining solution to explain this
statement and show how the parameters in the ‘Nash product’ determine the
outcome of the bargain.