Rationality and Solutions to Nonconvex Bargaining Problems: Rationalizable, Asymmetric and Nash Solutions
AbstractConditions α and β are two well-known rationality conditions in the theory of rational choice. This paper examines the implications of weaker versions of these two rationality conditions in the context of solutions to nonconvex bargaining problems. It is shown that, together with the standard axioms of efficiency and strict individual rationality, they imply rationalizability of solutions to nonconvex bargaining problems. We then characterize asymmetric Nash solutions by imposing a continuity and the scale invariance requirements. We also give a characterization of the Nash solution by using the two rationality conditions. These results make a further connection between solutions to non-convex bargaining problems and rationalizability of choice function in the theory of rational choice.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number 551.
Length: 17 p.
Date of creation: May 2011
Date of revision:
Note: This Version: April 2011
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Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-GTH-2011-06-25 (Game Theory)
- NEP-UPT-2011-06-25 (Utility Models & Prospect Theory)
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