Monotonicity with Respect to the Disagreement Point and Risk Sensitivity of a New Solution to Nash Bargaining Problems

01/12/1988

Monotonicity with Respect to the Disagreement Point and Risk Sensitivity of a New Solution to Nash Bargaining Problems

Lahiri Somdeb

Working Papers

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We propose a solution to the bargaining problem which responds 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 agent i's payoff, in agreement with intention. We also show that an increase in risk aversion is to the player's own advantage and to the disadvantage of the opponent in the two person case; to the disadvantage of all opponents in the multi-person generalization.

IIMA