The "power" dimension in a process of exchange

TL;DR

This paper expands economic exchange analysis by incorporating power and motivation dimensions, modeling their effects on individual welfare during negotiations, and emphasizing practical usability for field testing.

Contribution

It introduces a novel mathematical model that accounts for power and motivation in exchanges, extending beyond traditional economic theories.

Findings

Model captures welfare variations due to power exercise.

Incorporates diverse forms of motivation and power.

Designed for practical field testing applications.

Abstract

The field of study of this paper is the analysis of the exchange between two subjects. Circumscribed to the micro dimension, it is however expanded with respect to standard economic theory by introducing both the dimension of power and the motivation to exchange. The basic reference is made by the reflections of those economists, preeminently John Kenneth Galbraith, who criticize the removal from the neoclassical economy of the "power" dimension. We have also referred to the criticism that Galbraith, among others, makes to the assumption of neoclassical economists that the "motivation" in exchanges is solely linked to the reward, to the money obtained in the exchange. We have got around the problem of having a large number of types of power and also a large number of forms of motivation by directly taking into account the effects on the welfare of each subject, regardless of the means with which they are achieved: that is, referring to everything that happens in the negotiation process to the potential or real variations of the welfare function induced in each subject due to the exercise of the specific form of power, on a case by case basis, and of the intensity of the motivation to perform the exchange. In the construction of a mathematical model we paid great attention to its usability in field testing.