Oscar Volij (Department of Economics, Brown University, and Department of Economics, Hebrew University of Jerusalem.)
Abstract
We revisit the well known result that asserts that and increase in the degree of one's risk aversion improves the position one's opponents. for this purpose, we apply Yaari's dual theory of choice under risk both to Nash's bargaining problem and to Rubinstein's game of alternating offers. Within this theory and unlike under expected utility, risk aversion influences the bargaining outcome only when this outcome is random, namely, when the players are risk lovers. In this case, an increase in ones degree of risk aversion, increases one's share of the pie.
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Length: Date of creation: 06 Sep 1999 Date of revision: Publication status: Published in Games and Economic Behavior 41(1), 120-140, (2002) Handle: RePEc:nid:ovolij:010
Contact details of provider: Postal: Oscar Volij, Department of Economics, Ben-Gurion University, Beer-Sheva 84105, Israel Web page: http://volij.co.il/
Find related papers by JEL classification: C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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References listed on IDEAS 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.:
Martin J. Osborne & Ariel Rubinstein, 1994.
"A Course in Game Theory,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262650401.
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