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The Nash Solution as a von Neumann–Morgenstern Utility Function on Bargaining Games

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  • Anke Gerber

    (University of Hamburg)

Abstract

In this paper we prove that the symmetric Nash solution is a risk neutral von Neumann–Morgenstern utility function on the class of pure bargaining games. Our result corrects an error in Roth (Econometrica 46:587–594, 983, 1978) and generalizes Roth’s result to bargaining games with arbitrary status quo.

Suggested Citation

  • Anke Gerber, 2020. "The Nash Solution as a von Neumann–Morgenstern Utility Function on Bargaining Games," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 37(1), pages 87-104, November.
    • Handle: RePEc:spr:homoec:v:37:y:2020:i:1:d:10.1007_s41412-020-00095-9
    DOI: 10.1007/s41412-020-00095-9
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    References listed on IDEAS

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    1. Alvin E. Roth, 1977. "Individual Rationality and Nash's Solution to the Bargaining Problem," Mathematics of Operations Research, INFORMS, vol. 2(1), pages 64-65, February.
    2. Roth, Alvin E, 1978. "The Nash Solution and the Utility of Bargaining," Econometrica, Econometric Society, vol. 46(3), pages 587-594, May.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    4. Roth, Alvin, 2012. "The Shapley Value as a von Neumann-Morgenstern Utility," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 1-9.
    5. Anke Gerber, 1999. "The Nash Solution and the Utility of Bargaining: A Corrigendum," Econometrica, Econometric Society, vol. 67(5), pages 1239-1240, September.
    6. John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
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    Cited by:

    1. 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.

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