Agreed. The bargaining solution for the entire game can be very different from adding up the bargaining solutions for the subgames. If there’s a subgame where Alice cares very much about victory in that subgame (interior decorating choices) and Bob doesn’t care much, and another subgame where Bob cares very much about it (food choice) and Alice doesn’t care much, then the bargaining solution of the entire relationship game will end up being something like “Alice and Bob get some relative weights on how important their preferences are, and in all the subgames, the weighted sum of their utilities is maximized. Thus, Alice will be given Alice-favoring outcomes in the subgames where she cares the most about winning, and Bob will be given Bob-favoring outcomes in the subgames where he cares the most about winning”
And in particular, since it’s a sequential game, Alice can notice if Bob isn’t being fair, and enforce the bargaining solution by going “if you’re not aiming for something sorta like this, I’ll break off the relationship”. So, from Bob’s point of view, aiming for any outcome that’s too Bob-favoring has really low utility since Alice will inevitably catch on. (this is the time-extended version of “give up on achieving any outcome that drives the opponent below their BATNA”) Basically, in terms of raw utility, it’s still a bargaining game deep down, but once both sides take into account how the other will react, the payoff matrix for the restaurant game (taking the future interactions into account) will look like “it’s a really bad idea to aim for an outcome the other party would regard as unfair”
Agreed. The bargaining solution for the entire game can be very different from adding up the bargaining solutions for the subgames. If there’s a subgame where Alice cares very much about victory in that subgame (interior decorating choices) and Bob doesn’t care much, and another subgame where Bob cares very much about it (food choice) and Alice doesn’t care much, then the bargaining solution of the entire relationship game will end up being something like “Alice and Bob get some relative weights on how important their preferences are, and in all the subgames, the weighted sum of their utilities is maximized. Thus, Alice will be given Alice-favoring outcomes in the subgames where she cares the most about winning, and Bob will be given Bob-favoring outcomes in the subgames where he cares the most about winning”
And in particular, since it’s a sequential game, Alice can notice if Bob isn’t being fair, and enforce the bargaining solution by going “if you’re not aiming for something sorta like this, I’ll break off the relationship”. So, from Bob’s point of view, aiming for any outcome that’s too Bob-favoring has really low utility since Alice will inevitably catch on. (this is the time-extended version of “give up on achieving any outcome that drives the opponent below their BATNA”) Basically, in terms of raw utility, it’s still a bargaining game deep down, but once both sides take into account how the other will react, the payoff matrix for the restaurant game (taking the future interactions into account) will look like “it’s a really bad idea to aim for an outcome the other party would regard as unfair”