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The Nash solution is more utilitarian than egalitarian

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  • Shiran Rachmilevitch

Abstract

I state and prove formal versions of the claim that the Nash (Econometrica 18: 155–162, 1950 ) bargaining solution creates a compromise between egalitarianism and utilitarianism, but that this compromise is “biased”: the Nash solution puts more emphasis on utilitarianism than it puts on egalitarianism. I also extend the bargaining model by assuming that utility can be transferred between the players at some cost (the transferable and non-transferable utility models are polar cases of this more general one, corresponding to the cases where the transfer cost is zero and infinity, respectively); I use the extended model to better understand the connections between egalitarianism and utilitarianism. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Shiran Rachmilevitch, 2015. "The Nash solution is more utilitarian than egalitarian," Theory and Decision, Springer, vol. 79(3), pages 463-478, November.
    • Handle: RePEc:kap:theord:v:79:y:2015:i:3:p:463-478
    DOI: 10.1007/s11238-014-9477-5
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    References listed on IDEAS

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    Cited by:

    1. Omer F. Baris, 2018. "Timing effect in bargaining and ex ante efficiency of the relative utilitarian solution," Theory and Decision, Springer, vol. 84(4), pages 547-556, June.
    2. Shiran Rachmilevitch, 2023. "The Nash bargaining solution: sometimes more utilitarian, sometimes more egalitarian," Theory and Decision, Springer, vol. 95(3), pages 457-464, October.
    3. Shiran Rachmilevitch, 2016. "Egalitarian–utilitarian bounds in Nash’s bargaining problem," Theory and Decision, Springer, vol. 80(3), pages 427-442, March.
    4. Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2018. "Conventional contracts, intentional behavior and logit choice: Equality without symmetry," Games and Economic Behavior, Elsevier, vol. 110(C), pages 273-294.
    5. Magali Fia & Lorenzo Sacconi, 2019. "Justice and Corporate Governance: New Insights from Rawlsian Social Contract and Sen’s Capabilities Approach," Journal of Business Ethics, Springer, vol. 160(4), pages 937-960, December.
    6. Emin Karagözoğlu & Kerim Keskin, 2015. "A Tale of Two Bargaining Solutions," Games, MDPI, vol. 6(2), pages 1-14, June.
    7. Claus-Jochen Haake & Cheng-Zhong Qin, 2018. "On unification of solutions to the bargaining problem," Working Papers CIE 113, Paderborn University, CIE Center for International Economics.
    8. D. Marc Kilgour & Rudolf Vetschera, 2024. "Two-Person Fair Division with Additive Valuations," Group Decision and Negotiation, Springer, vol. 33(4), pages 745-774, August.
    9. 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.
    10. Shiran Rachmilevitch, 2022. "Pre-bargaining Investment Implies a Pareto Ranking of Bargaining Solutions," Group Decision and Negotiation, Springer, vol. 31(4), pages 769-787, August.
    11. Shiran Rachmilevitch, 2019. "Egalitarianism, utilitarianism, and the Nash bargaining solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(4), pages 741-751, April.
    12. Barry Nalebuff, 2021. "A Perspective-Invariant Approach to Nash Bargaining," Management Science, INFORMS, vol. 67(1), pages 577-593, January.
    13. Shiran Rachmilevitch, 2020. "Rewarding moderate behavior in a dynamic Nash Demand Game," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 639-650, June.

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