Non-optimal Nash bargaining solutions

M Mariotti

    Research output: Contribution to journalArticlepeer-review

    7 Citations (Scopus)

    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 languageEnglish
    Pages (from-to)15-20
    Number of pages6
    JournalEconomics Letters
    Volume52
    Issue number1
    Publication statusPublished - Jul 1996

    Keywords

    • Nash Bargaining Solution
    • Pareto Optimality

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