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The Time-Preference Nash Solution

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Author Info
Nir Dagan ()
Oscar Volij ()
Eyal Winter ()

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Abstract

The primitives of a bargaining problem consist of a set, S, of feasible utility pairs and a disagree- ment point in it. The idea is that the set S is induced by an underlying set of physical outcomes which, for the purposes of the analysis, can be abstracted away. In a very influential paper Nash (1950) gives an axiomatic characterization of what is now the widely known Nash bargaining solution. Rubinstein, Safra, and Thomson (1992) (RST in the sequel) recast the bargaining problem into the underlying set of physical alternatives and give an axiomatization of what is known as the ordinal Nash bargaining solution. This solution has a very natural interpretation and has the interesting property that when risk preferences satisfy the expected utility axioms, it induces the standard Nash bargaining solution of the induced bargaining problem. This property justifies the proper name in the solution’s appellation. The purpose of this paper is to give an axiomatic characterization of the rule that assigns the time-preference Nash outcome to each bargaining problem.

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Publisher Info
Paper provided by Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp265.

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Length: 20 pages
Date of creation: Mar 2001
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Handle: RePEc:huj:dispap:dp265

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Volij, Oscar & Winter, Eyal, 2002. "On risk aversion and bargaining outcomes," Games and Economic Behavior, Elsevier, vol. 41(1), pages 120-140, October. [Downloadable!] (restricted)
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  2. Eyal Winter & Oscar Volij & Nir Dagan, 2002. "A characterization of the Nash bargaining solution," Social Choice and Welfare, Springer, vol. 19(4), pages 811-823. [Downloadable!] (restricted)
    Other versions:
  3. Oscar Volij, 1999. "On Risk Aversion and Bargaining Outcomes," Economic theory and game theory 010, Oscar Volij. [Downloadable!]
  4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April. [Downloadable!] (restricted)
  5. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer. [Downloadable!] (restricted)
  6. Safra Zvi & Zilcha Itzhak, 1993. "Bargaining Solutions without the Expected Utility Hypothesis," Games and Economic Behavior, Elsevier, vol. 5(2), pages 288-306, April. [Downloadable!] (restricted)
  7. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January. [Downloadable!] (restricted)
  8. Rubinstein, Ariel & Safra, Zvi & Thomson, William, 1992. "On the Interpretation of the Nash Bargaining Solution and Its Extension to Non-expected Utility Preferences," Econometrica, Econometric Society, vol. 60(5), pages 1171-86, September. [Downloadable!] (restricted)
  9. Hanany, Eran & Safra, Zvi, 2000. "Existence and Uniqueness of Ordinal Nash Outcomes," Journal of Economic Theory, Elsevier, vol. 90(2), pages 254-276, February. [Downloadable!] (restricted)
  10. Grant, Simon & Kajii, Atsushi, 1995. "A Cardinal Characterization of the Rubinstein-Safra-Thomson Axiomatic Bargaining Theory," Econometrica, Econometric Society, vol. 63(5), pages 1241-49, September. [Downloadable!] (restricted)
  11. Burgos, Albert & Grant, Simon & Kajii, Atsushi, 2002. "Bargaining and Boldness," Games and Economic Behavior, Elsevier, vol. 38(1), pages 28-51, January. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Oscar Volij, 1999. "On Risk Aversion and Bargaining Outcomes," Economic theory and game theory 010, Oscar Volij. [Downloadable!]
  2. Klaus Kultti & Hannu Vartiainen, 2007. "Von Neumann-Morgenstern Stable Set Bridges Time-Preferences to the Nash Solution," Contributions to Theoretical Economics, Berkeley Electronic Press, vol. 7(1), pages 1251-1251. [Downloadable!] (restricted)
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