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Bargaining with intertemporal maximin payoffs

Author

Listed:
  • Vincent Martinet

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Pedro Gajardo
  • Michel de Lara
  • Héctor Ramírez Cabrera

Abstract

We present a new class of dynamic bargaining problems, called "bargaining problems with intertemporal maximin payoffs," that may reflect sustainability problems having to encompass conflicting issues in the long-run. Each bargainer (or stake-holder) has a representative indicator, namely a function of the state and decisions, and aims at maximizing its minimal value over time. Bargaining on sustainability issues consists in defining the vector of stake-holder's payoffs. We are interested in defining the set of feasible outcomes of such problems. This set is interpreted as a support for a social choice of sustainability objectives. We introduce a MONDAI condition – Monotonicity of Dynamics And Indicators – consistent with many economic problems and, in particular, "environmental economic" sustainability issues. We characterize the set of feasible outcomes for problems satisfying these monotonicity properties, and the bargaining solutions under the axioms of Pareto efficiency and Independence of Irrelevant Alternatives. We also provide a "satisficing" common decision rule to achieve any given solution. We then examine the time-consistency of the solution under the axioms of Veto Power and Individual Rationality.

Suggested Citation

  • Vincent Martinet & Pedro Gajardo & Michel de Lara & Héctor Ramírez Cabrera, 2011. "Bargaining with intertemporal maximin payoffs," Working Papers hal-04141012, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141012
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141012
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    bargaining theory; dynamics; maximin; monotonicity; feasibility set; sustainability;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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