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Noncooperative foundations for the kalai-smorodinsky and equal sacrifice solutions via prominence structures

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  • Nejat Anbarci

Abstract

In bargaining, players may adopt different prominence structures when making demands: (i) each player might use (1/N)th of his maximum monetary payoff as the prominence level or (ii) players might use a common prominence level. This paper considers a scheme in which players alternate making demands. It turns out that if the prominence levels described by (i) are used and if players have utilities linear in money, the outcome of this scheme converges to that of the Kalai-Smorodinsky solution as players' prominence levels get smaller. If the common prominence level of (ii) is used and if players have identical constant marginal utilities of money, the outcome of this scheme converges to that of the equal sacrifice solution as that prominence level gets smaller. Copyright International Atlantic Economic Society 1997

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  • Nejat Anbarci, 1997. "Noncooperative foundations for the kalai-smorodinsky and equal sacrifice solutions via prominence structures," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 25(4), pages 403-411, December.
    • Handle: RePEc:kap:atlecj:v:25:y:1997:i:4:p:403-411
    DOI: 10.1007/BF02298349
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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
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    7. Nejat Anbarci, 1993. "Noncooperative Foundations of the Area Monotonic Solution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 245-258.
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    Cited by:

    1. Nejat Anbarci, 2008. "Relative Responsiveness of Bargaining Solutions to Changes in Status-quo Payoffs," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(3), pages 293-299, September.

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