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Risk aversion in the Nash bargaining problem with uncertainty

Author

Listed:
  • Sanxi Li
  • Hailin Sun
  • Jianye Yan
  • Xundong Yin

Abstract

In this study, we apply the aggregation property of Identical Shape Harmonic Absolute Risk Aversion utility functions to analyze the comparative statics properties of a bargaining model with uncertainty. We identify sufficient and necessary conditions under which an increase in one’s degree of risk aversion benefits/hurts one’s opponent. We apply our model to analyze the problems of bargaining over both insurance and incentive contracts. Copyright Springer-Verlag Wien 2015

Suggested Citation

  • Sanxi Li & Hailin Sun & Jianye Yan & Xundong Yin, 2015. "Risk aversion in the Nash bargaining problem with uncertainty," Journal of Economics, Springer, vol. 115(3), pages 257-274, July.
    • Handle: RePEc:kap:jeczfn:v:115:y:2015:i:3:p:257-274
    DOI: 10.1007/s00712-014-0413-5
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    References listed on IDEAS

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    1. William Thomson, 2022. "On the axiomatic theory of bargaining: a survey of recent results," Review of Economic Design, Springer;Society for Economic Design, vol. 26(4), pages 491-542, December.

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    More about this item

    Keywords

    Bargaining; The Nash solution; ISHARA preference ; Risk aversion; C70; C78;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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