Egalitarian–utilitarian bounds in Nash’s bargaining problem

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Abstract

For every 2-person bargaining problem, the Nash bargaining solution selects a point that is “between” the relative (or normalized) utilitarian point and the relative egalitarian (i.e., Kalai–Smorodinsky) point. Also, it is “between” the (non-normalized) utilitarian and egalitarian points. I improve these bounds. I also derive a new characterization of the Nash solution which combines a bounds property together with strong individual rationality and an axiom which is new to Nash’s bargaining model, the sandwich axiom. The sandwich axiom is a weakening of Nash’s IIA.

Original languageEnglish
Pages (from-to)427-442
Number of pages16
JournalTheory and Decision
Volume80
Issue number3
DOIs
StatePublished - 1 Mar 2016

Bibliographical note

Publisher Copyright:
© 2015, Springer Science+Business Media New York.

Keywords

  • Bargaining
  • Bounds
  • Egalitarianism
  • Nash bargaining solution
  • Sandwich axiom
  • Utilitarianism

ASJC Scopus subject areas

  • General Decision Sciences
  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • General Social Sciences
  • Economics, Econometrics and Finance (all)
  • Computer Science Applications

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