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Coincidence of two solutions to Nash’s bargaining problem

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  • Stambaugh, Todd

Abstract

In 1950, John Nash gave an elegant solution to the bargaining problem using his somewhat controversial IIA axiom. Twenty-five years later, Ehud Kalai and Meir Smorodinsky gave a different solution replacing the IIA condition with their own Monotonicity condition. While the two solutions obviously coincide under certain conditions (e.g. when the problem is symmetric), they do not in general agree. This paper presents a complete account of the precise conditions under which the two solutions coincide.

Suggested Citation

  • Stambaugh, Todd, 2017. "Coincidence of two solutions to Nash’s bargaining problem," Economics Letters, Elsevier, vol. 157(C), pages 148-151.
    • Handle: RePEc:eee:ecolet:v:157:y:2017:i:c:p:148-151
    DOI: 10.1016/j.econlet.2017.06.002
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    References listed on IDEAS

    as
    1. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
    2. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    3. Rubinstein, Ariel & Safra, Zvi & Thomson, William, 1992. "On the Interpretation of the Nash Bargaining Solution and Its Extension to Non-expected Utility Preferences," Econometrica, Econometric Society, vol. 60(5), pages 1171-1186, September.
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    More about this item

    Keywords

    Bargaining; Nash bargaining;

    JEL classification:

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

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