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Fairness in Bargaining and the Kalai-Smorodinsky Solution

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Abstract

A bargaining solution guarantees minimal equity if each player's payoff is at least as large as the minimum of the payoffs assigned to him by the equal-gain (i.e., egalitarian) and equal-loss solutions. The Kalai-Smorodinsky solution is the unique scale-invariant 2-person solution with this property. There does not exist a scale-invariant n-person solution with this property.

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  • Rachmilevitch, Shiran, "undated". "Fairness in Bargaining and the Kalai-Smorodinsky Solution," Working Papers WP2011/12, University of Haifa, Department of Economics.
    • Handle: RePEc:haf:huedwp:wp201112
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    File URL: http://hevra.haifa.ac.il/econ/wp_files/wp201112.pdf
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    References listed on IDEAS

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    1. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
    2. Chun, Youngsub, 1988. "The equal-loss principle for bargaining problems," Economics Letters, Elsevier, vol. 26(2), pages 103-106.
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    1. Rachmilevitch, Shiran, "undated". "The Nash Bargaining Solution and Interpersonal Utility Comparisons," Working Papers WP2012/1, University of Haifa, Department of Economics.

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    More about this item

    Keywords

    Bargaining; fairness; Kalai-Smorodinsky solution;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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