Redundancy of Additional Alternatives and Solutions to Bargaining Problems

01/03/1989

Redundancy of Additional Alternatives and Solutions to Bargaining Problems

Lahiri Somdeb

Working Papers

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In this paper we propose a new axiom called the redundancy of additional alternatives axiom, which is satisfied by the proportional solution. A weaker version of the same axiom is satisfied by the Kalai-Smorodinsky (3) solution. The Nash solution satisfies neither. This new axiom seems to be a reasonable compromise between accepting the independence of irrelevant alternatives axiom and rejecting it outright, from the realm of axiomatic models of bargaining.

IIMA