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Axiomatic Bargaining on Economic Enviornments with Lott

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Abstract

Most contributions in axiomatic bargaining are phrased in the space of utilities. This comes in sharp contrast with standards in most other fields of economic theory. The present paper shows how Nashís original axiomatic system can be rephrased in a natural class of economic environments with lotteries, and how his uniqueness result can be recovered, provided one completes the system with a property of independence with respect to preferences over unfeasible alternatives. Similar results can be derived for the Kalai-Smorodinsky solution if and only if bargaining may involve multiple goods. The paper also introduces a distinction between welfarism and cardinal welfarism, and emphasizes that the Nash solution is ordinally invariant on the class of von Neumann-Morgensterm preferences.

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  • Geoffroy de Clippel, 2009. "Axiomatic Bargaining on Economic Enviornments with Lott," Working Papers 2009-5, Brown University, Department of Economics.
    • Handle: RePEc:bro:econwp:2009-5
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    Cited by:

    1. de Clippel, Geoffroy & Bejan, Camelia, 2011. "No profitable decompositions in quasi-linear allocation problems," Journal of Economic Theory, Elsevier, vol. 146(5), pages 1995-2012, September.
    2. Yves Sprumont, 2013. "On relative egalitarianism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(4), pages 1015-1032, April.
    3. SPRUMONT, Yves, 2009. "Relative Egalitarianism and Related Criteria," Cahiers de recherche 2009-02, Universite de Montreal, Departement de sciences economiques.

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    Keywords

    Bargaining; Welfarism; Nash; Kalai-Smorodinsky; Expected Utility;
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