Abstract
Because Weak Pareto Optimality (WPO) only excludes the disagreement solution in the Nash (Econometrica, 1950, 18, 155-162) characterization, it is not possible to obtain 'intermediate' Nash Bargaining Solutions (NBS) by dropping WPO. We provide an axiomatic characterization of the following class phi(alpha)(.,.) of such intermediate solutions: for a bargaining problem (S, d), phi(alpha)(S, d) = (1 - alpha)d + alpha nu(S, d), where nu(.,.) denotes the NBS and alpha epsilon [0, 1]. Relatedly, we provide a new characterization of the NBS in which the role of independence axioms is reduced and the role of WPO is extended to exclude exactly all these intermediate solutions.
| Original language | English |
|---|---|
| Pages (from-to) | 15-20 |
| Number of pages | 6 |
| Journal | Economics Letters |
| Volume | 52 |
| Issue number | 1 |
| Publication status | Published - Jul 1996 |
Keywords
- Nash Bargaining Solution
- Pareto Optimality