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The Nash solution is more utilitarian than egalitarian

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  • Shiran Rachmilevitch

Abstract

I state and prove formal versions of the claim that the Nash (Econometrica 18: 155–162, 1950 ) bargaining solution creates a compromise between egalitarianism and utilitarianism, but that this compromise is “biased”: the Nash solution puts more emphasis on utilitarianism than it puts on egalitarianism. I also extend the bargaining model by assuming that utility can be transferred between the players at some cost (the transferable and non-transferable utility models are polar cases of this more general one, corresponding to the cases where the transfer cost is zero and infinity, respectively); I use the extended model to better understand the connections between egalitarianism and utilitarianism. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Shiran Rachmilevitch, 2015. "The Nash solution is more utilitarian than egalitarian," Theory and Decision, Springer, vol. 79(3), pages 463-478, November.
    • Handle: RePEc:kap:theord:v:79:y:2015:i:3:p:463-478
    DOI: 10.1007/s11238-014-9477-5
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    References listed on IDEAS

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    Cited by:

    1. Omer F. Baris, 2018. "Timing effect in bargaining and ex ante efficiency of the relative utilitarian solution," Theory and Decision, Springer, vol. 84(4), pages 547-556, June.
    2. Shiran Rachmilevitch, 2023. "The Nash bargaining solution: sometimes more utilitarian, sometimes more egalitarian," Theory and Decision, Springer, vol. 95(3), pages 457-464, October.
    3. Shiran Rachmilevitch, 2016. "Egalitarian–utilitarian bounds in Nash’s bargaining problem," Theory and Decision, Springer, vol. 80(3), pages 427-442, March.
    4. Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2018. "Conventional contracts, intentional behavior and logit choice: Equality without symmetry," Games and Economic Behavior, Elsevier, vol. 110(C), pages 273-294.
    5. Magali Fia & Lorenzo Sacconi, 2019. "Justice and Corporate Governance: New Insights from Rawlsian Social Contract and Sen’s Capabilities Approach," Journal of Business Ethics, Springer, vol. 160(4), pages 937-960, December.
    6. Emin Karagözoğlu & Kerim Keskin, 2015. "A Tale of Two Bargaining Solutions," Games, MDPI, vol. 6(2), pages 1-14, June.
    7. Claus-Jochen Haake & Cheng-Zhong Qin, 2018. "On unification of solutions to the bargaining problem," Working Papers CIE 113, Paderborn University, CIE Center for International Economics.
    8. William Thomson, 2022. "On the axiomatic theory of bargaining: a survey of recent results," Review of Economic Design, Springer;Society for Economic Design, vol. 26(4), pages 491-542, December.
    9. Shiran Rachmilevitch, 2022. "Pre-bargaining Investment Implies a Pareto Ranking of Bargaining Solutions," Group Decision and Negotiation, Springer, vol. 31(4), pages 769-787, August.
    10. Shiran Rachmilevitch, 2019. "Egalitarianism, utilitarianism, and the Nash bargaining solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(4), pages 741-751, April.
    11. Barry Nalebuff, 2021. "A Perspective-Invariant Approach to Nash Bargaining," Management Science, INFORMS, vol. 67(1), pages 577-593, January.
    12. Shiran Rachmilevitch, 2020. "Rewarding moderate behavior in a dynamic Nash Demand Game," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 639-650, June.

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