The Tempered Aspirations solution for bargaining problems with a reference point
Gupta and Livne (1988) modified Nash’s (1950) original bargaining problem through the introduction of a reference point restricted to lie in the bargaining set. Additionally, they characterized a solution concept for this augmented bargaining problem. We propose and axiomatically characterize a new solution concept for bargaining problems with a reference point: the Tempered Aspirations solution. In Kalai and Smorodinsky (1975), aspirations are given by the so called ideal or utopia point. In our setting, however, the salience of the reference point mutes or tempers the negotiators’ aspirations. Thus, our solution is defined to be the maximal feasible point on the line segment joining the modified aspirations and disagreement vectors. The Tempered Aspirations solution can be understood as a “dual” version of the Gupta–Livne solution or, alternatively, as a version of Chun and Thomson’s (1992) Proportional solution in which the claims point is endogenous. We also conduct an extensive axiomatic analysis comparing the Gupta–Livne to our Tempered Aspirations solution.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Chun, Youngsub & Thomson, William, 1992.
"Bargaining problems with claims,"
Mathematical Social Sciences,
Elsevier, vol. 24(1), pages 19-33, August.
- Sunil Gupta & Zvi A. Livne, 1988. "Resolving a Conflict Situation with a Reference Outcome: An Axiomatic Model," Management Science, INFORMS, vol. 34(11), pages 1303-1314, November.
- Carmen Herrero & Antonio Villar, 2009.
"The Rights-Egalitarian Solution for NTU Sharing Problems,"
09.01, Universidad Pablo de Olavide, Department of Economics.
- Carmen Herrero & Antonio Villar, 2010. "The rights egalitarian solution for NTU sharing problems," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 137-150, March.
- Chun, Y. & Thomson, W., 1988.
"Nash Solution And Uncertain Disagreement Points,"
RCER Working Papers
134, University of Rochester - Center for Economic Research (RCER).
- Ehud Kalai, 1977.
"Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons,"
179, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-30, October.
- Bossert, Walter, 1993. "An alternative solution to bargaining problems with claims," Mathematical Social Sciences, Elsevier, vol. 25(3), pages 205-220, May.
- Moulin, Herve, 1985.
"Egalitarianism and Utilitarianism in Quasi-linear Bargaining,"
Econometric Society, vol. 53(1), pages 49-67, January.
- Moulin Herve, 1984. "Egalitarianisme and utilitarianism in quasi-linear bargaining," CEPREMAP Working Papers (Couverture Orange) 8417, CEPREMAP.
- Bossert, Walter & Nosal, Ed & Sadanand, Venkatraman, 1996. "Bargaining under Uncertainty and the Monotone Path Solutions," Games and Economic Behavior, Elsevier, vol. 14(2), pages 173-189, June.
- Bossert, Walter, 1992. "Monotonic solutions for bargaining problems with claims," Economics Letters, Elsevier, vol. 39(4), pages 395-399, August.
- Lensberg, Terje, 1988. "Stability and the Nash solution," Journal of Economic Theory, Elsevier, vol. 45(2), pages 330-341, August.
- Chun, Youngsub & Thomson, William, 1990. "Egalitarian solutions and uncertain disagreement points," Economics Letters, Elsevier, vol. 33(1), pages 29-33, May.
- P. V. (Sundar) Balakrishnan & Jehoshua Eliashberg, 1995. "An Analytical Process Model of Two-Party Negotiations," Management Science, INFORMS, vol. 41(2), pages 226-243, February.
- Thomson, William, 1983. "Problems of fair division and the Egalitarian solution," Journal of Economic Theory, Elsevier, vol. 31(2), pages 211-226, December.
- Myerson, Roger B, 1981. "Utilitarianism, Egalitarianism, and the Timing Effect in Social Choice Problems," Econometrica, Econometric Society, vol. 49(4), pages 883-97, June.
- Thomson, William, 1987. "Monotonicity of bargaining solutions with respect to the disagreement point," Journal of Economic Theory, Elsevier, vol. 42(1), pages 50-58, June.
- Chun, Youngsub & Thomson, William, 1990. "Bargaining with Uncertain Disagreement Points," Econometrica, Econometric Society, vol. 58(4), pages 951-59, July.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
When requesting a correction, please mention this item's handle: RePEc:eee:matsoc:v:62:y:2011:i:3:p:144-150. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.