IDEAS home Printed from https://ideas.repec.org/p/kud/kuiedp/0402.html
   My bibliography  Save this paper

Bargaining and Incentive Compatibility: A Pareto Frontier Approach

Author

Listed:
  • Juan Camilo Gómez

    (Institute of Economics, University of Copenhagen)

Abstract

Two agents negotiate, according to the Nash bargaining solution, over the allocation of a single (divisible) commodity (or multiple commodities with fixed ordinal preferences). It has been shown that in this situation agents find dominant to report their least risk averse utility functions. This result depends crucially on the fact that in this kind of "distortion game", agents have been restricted to report risk-averse utility functions. This paper studies the distortion game originated when agents are also allowed to claim non risk-averse utility functions. Contrasting with previous literature, we find multiple Nash equilibria, multiple payo outcomes and the existence of a first-mover advantage.

Suggested Citation

  • Juan Camilo Gómez, 2003. "Bargaining and Incentive Compatibility: A Pareto Frontier Approach," Discussion Papers 04-02, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0402
    as

    Download full text from publisher

    File URL: http://www.econ.ku.dk/english/research/publications/wp/2004/0402.pdf/
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kud:kuiedp:0402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/okokudk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.