Non-optimal Nash bargaining solutions

M  Mariotti

Non-optimal Nash bargaining solutions

M Mariotti

Research output: Contribution to journal › Article › peer-review

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

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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.",

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AB - 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.

KW - Nash Bargaining Solution

KW - Pareto Optimality

UR - https://www.scopus.com/pages/publications/0030305829

M3 - Article

SN - 0165-1765

VL - 52

SP - 15

EP - 20

JO - Economics Letters

JF - Economics Letters

IS - 1

ER -

Non-optimal Nash bargaining solutions

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Keywords

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