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How to Add Apples and Pears: Non-Symmetric Nash Bargaining and the Generalized Joint Surplus

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Author Info

  • Samuel Danthine

    ()
    (Department of Economics, Université du Québec à Montréal)

  • Noemí Navarro

    ()
    (Department of Economics, Université de Sherbrooke)

Abstract

We generalize the equivalence of the non-symmetric Nash bargaining solution and the linear division of the joint surplus when bargainers use different utility scales. This equivalence in the general case requires the surplus each agent receives to be expressed in compatible, or comparable, units. This result is valid in the case of bargaining over multiple-issues. In addition, we discuss the requirements on the curvatures of the agents’ utility functions, or, in other words, on the bargainers’ attitudes towards risk.

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File URL: http://webdeptos.uma.es/THEconomica/malagawpseries/Papers/METCwp2010-4.pdf
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Bibliographic Info

Paper provided by Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center in its series Working Papers with number 2010-04.

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Length: 18 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:mal:wpaper:2010-4

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Keywords: Bargaining Problems; Non-Symmetric Nash Bargaining Solution; Linear Sharing;

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References

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  1. Olivier Jean Blanchard & Peter Diamond, 1990. "Ranking, Unemployment Duration, and Wages," NBER Working Papers 3387, National Bureau of Economic Research, Inc.
  2. Rupert, Peter & Schindler, Martin & Wright, Randall, 2001. "Generalized search-theoretic models of monetary exchange," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 605-622, December.
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  8. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-39, March.
  9. Kagel,John H. & Battalio,Raymond C. & Green,Leonard, 1995. "Economic Choice Theory," Cambridge Books, Cambridge University Press, number 9780521454889, October.
  10. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-18, May.
  11. Samuel Danthine & Noemí Navarro, 2010. "How to Add Apples and Pears: Non-Symmetric Nash Bargaining and the Generalized Joint Surplus," Working Papers 2010-04, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
  12. Cahuc, Pierre & Lehmann, Etienne, 2000. "Should unemployment benefits decrease with the unemployment spell?," Journal of Public Economics, Elsevier, vol. 77(1), pages 135-153, July.
  13. Conley, John P. & Wilkie, Simon, 1996. "An Extension of the Nash Bargaining Solution to Nonconvex Problems," Games and Economic Behavior, Elsevier, vol. 13(1), pages 26-38, March.
  14. Serrano, Roberto & Shimomura, Ken-Ichi, 1998. "Beyond Nash Bargaining Theory: The Nash Set," Journal of Economic Theory, Elsevier, vol. 83(2), pages 286-307, December.
  15. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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Cited by:
  1. Samuel Danthine & Noemí Navarro, 2013. "How to Add Apples and Pears: Non-Symmetric Nash Bargaining and the Generalized Joint Surplus," Economics Bulletin, AccessEcon, vol. 33(4), pages 2840-2850.

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