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Nash demand game and the Kalai-Smorodinsky solution

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  • Anbarci, Nejat
  • Boyd III, John H.

Abstract

We introduce two new variations on the Nash demand game. One, like all known Nash-like demand games so far, has the Nash solution outcome as its equilibrium outcome. In the other, the range of solutions depends on an exogenous breakdown probability; surprisingly, the Kalai-Smorodinsky outcome proves to be the most robust equilibrium outcome. While the Kalai-Smorodinsky solution always finishes on top, there is no possible general ranking among the remaining solution concepts considered; in fact, the rest of the solution concepts take their turns at the bottom at various bargaining problems, depending on the specifics of the bargaining setup.

Suggested Citation

  • Anbarci, Nejat & Boyd III, John H., 2008. "Nash demand game and the Kalai-Smorodinsky solution," Working Papers eco_2008_11, Deakin University, Department of Economics.
    • Handle: RePEc:dkn:econwp:eco_2008_11
    DOI: 10.1016/j.geb.2010.07.009
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    References listed on IDEAS

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    Cited by:

    1. Roberto Serrano, 2020. "Sixty-Seven Years of the Nash Program: Time for Retirement?," Working Papers 2020-20, Brown University, Department of Economics.
    2. Emin Karagözoğlu & Shiran Rachmilevitch, 2018. "Implementing egalitarianism in a class of Nash demand games," Theory and Decision, Springer, vol. 85(3), pages 495-508, October.
    3. Bochet, Olivier & Laurent-Lucchetti, Jeremy & Leroux, Justin & Sinclair-Desgagné, Bernard, 2019. "Collective risk-taking in the commons," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 277-296.
    4. Johannes Spinnewijn & Frans Spinnewyn, 2015. "Revising claims and resisting ultimatums in bargaining problems," Review of Economic Design, Springer;Society for Economic Design, vol. 19(2), pages 91-116, June.
    5. Anbarci, Nejat & Feltovich, Nick, 2012. "Bargaining with random implementation: An experimental study," Games and Economic Behavior, Elsevier, vol. 76(2), pages 495-514.
    6. Kang Rong, 2015. "Bargaining with split-the-difference arbitration," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 441-455, September.
    7. Rong Kang, 2012. "An Axiomatic Approach to Arbitration and its Application in Bargaining Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-34, September.

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