Monotonicity with Respect to the Disagreement Point and A New Solution to Nash Bargaining Problem: A Note

01/01/1988

Monotonicity with Respect to the Disagreement Point and A New Solution to Nash Bargaining Problem: A Note

Lahiri Somdeb

Working Papers

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We propose a solution to the bargaining problem which response appropriately to certain changes in the disagreement point, for a fixed feasible set. If di increases, while for j=I dj remains constant, our solution recommends an increase in ageni's payoff, in agreement with intuition. This solution also satisfies the more conventional requirements, which are usually imposed, e.g. individual rationality, Pareto optimality, Symmetry and Invariance. With Respect to Affine Transformation. It is shown that our solution is the only monotone solution, which satisfies these properties.

IIMA