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Sharing a Risky Cake

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Abstract

Consider an n-person Nash Bargaining problem where players bargain over the division of a cake whose size is stochastic. In such a game, the players are not only bargaining for more cake, but they are also sharing risk. This paper examines and provides the solution to this problem and highlights a few special cases.

Suggested Citation

  • David R. Baqaee, 2009. "Sharing a Risky Cake," Working Papers in Economics 09/20, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:09/20
    as

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    File URL: https://repec.canterbury.ac.nz/cbt/econwp/0920.pdf
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    References listed on IDEAS

    as
    1. Orazio Attanasio & Laura Blow & Robert Hamilton & Andrew Leicester, 2005. "Consumption, house prices and expectations," Bank of England working papers 271, Bank of England.
    2. Emmanuel De Veirman & Ashley Dunstan, 2008. "How do Housing Wealth, Financial Wealth and Consumption Interact? Evidence from New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2008/05, Reserve Bank of New Zealand.
    3. François Ortalo-Magné & Sven Rady, 2006. "Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints ," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(2), pages 459-485.
    4. Grant Scobie & Trinh Le & John Gibson, 2007. "Housing in the Household Portfolio and Implications for Retirement Saving: Some Initial Finding from SOFIE," Treasury Working Paper Series 07/04, New Zealand Treasury.
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    More about this item

    Keywords

    Risk sharing; uncertainty; Nash bargaining;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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