Bargaining Theory is a concept in economics and game theory that examines how individuals or groups negotiate to reach an agreement. It focuses on the strategies and outcomes of negotiations, considering factors like preferences, available information, and the power dynamics between parties. The theory helps explain how different negotiation tactics can lead to various results, such as cooperation or conflict. In Bargaining Theory, key elements include bargaining power, utility, and payoff. The theory often uses models to illustrate how parties can maximize their benefits while minimizing costs. Understanding these dynamics can improve negotiation skills in various contexts, from business deals to international relations.