On the consistency of data with bargaining theories
We develop observable restrictions of well-known theories of bargaining over money. We suppose that we observe a finite data set of bargaining outcomes, including data on allocations and disagreement points, but no information on utility functions. We ask when a given theory could generate the data. We show that if the disagreement point is fixed and symmetric, the Nash, utilitarian, and egalitarian max-min bargaining solutions are all observationally equivalent. Data compatible with these theories are in turn characterized by the property of comonotonicity of bargaining outcomes. We establish different tests for each of the theories under consideration in the case in which the disagreement point can be variable. Our results are readily applicable, outside of the bargaining framework, to testing the tax code for compliance with the principle of equal loss.
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.:
- Kalandrakis, Tasos, 2010.
Econometric Society, vol. 5(1), January.
- de Clippel, Geoffroy & Eliaz, Kfir, 2012.
"Reason-based choice: a bargaining rationale for the attraction and compromise effects,"
Econometric Society, vol. 7(1), January.
- Geoffroy de Clippel & Kfir Eliaz, 2009. "Reason-Based Choice: A Bargaining Rationale for the Attraction and Compromise Effects," Working Papers 2009-4, Brown University, Department of Economics.
- de Clippel, Geoffroy & Eliaz, Kfir, 2009. "Reason-Based Choice: A Bargaining Rationale for the Attraction and Compromise Effects," CEPR Discussion Papers 7414, C.E.P.R. Discussion Papers.
- Özgür Kıbrıs, 2012. "A revealed preference analysis of solutions to simple allocation problems," Theory and Decision, Springer, vol. 72(4), pages 509-523, April.
- Lensberg, Terje, 1987. "Stability and Collective Rationality," Econometrica, Econometric Society, vol. 55(4), pages 935-61, July.
- Richter, Marcel K. & Wong, K.-C.Kam-Chau, 2004. "Concave utility on finite sets," Journal of Economic Theory, Elsevier, vol. 115(2), pages 341-357, April.
- Laurens Cherchye & Thomas Demuynck & Bram De Rock, 2013.
"Nash‐Bargained Consumption Decisions: A Revealed Preference Analysis,"
Royal Economic Society, vol. 123, pages 195-235, 03.
- Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2011. "Nash bargained consumption decisions: a revealed preference analysis," Working Papers Department of Economics ces11.07, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Laurens Cherchye & Thomas Demuynck & Bram De Rock, 2013. "Nash-Bargained Consumption Decisions: A Revealed Preference Analysis," ULB Institutional Repository 2013/131704, ULB -- Universite Libre de Bruxelles.
- Carvajal, Andrés & González, Natalia, 2014. "On refutability of the Nash bargaining solution," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 177-186.
- Thomson,William & Lensberg,Terje, 1989.
"Axiomatic Theory of Bargaining with a Variable Number of Agents,"
Cambridge University Press, number 9780521343831.
- Thomson,William & Lensberg,Terje, 2006. "Axiomatic Theory of Bargaining with a Variable Number of Agents," Cambridge Books, Cambridge University Press, number 9780521027038.
- Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, vol. 44(2), pages 321-335, April.
- Daniel S. Hamermesh, 1973. "Who "wins" in wage bargaining?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 26(4), pages 1146-1149, July.
- repec:oup:restud:v:79:y:2012:i:1:p:162-195 is not listed on IDEAS
- 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:the:publsh:1095. 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: (Martin J. Osborne)
If references are entirely missing, you can add them using this form.