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Characterizations of Bargaining Solutions in Production Economies with Unequal Skills

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  • Naoki Yoshihara

Abstract

In production economies with unequal skills, this paper characterizes bargaining solutions by using axioms on allocation rules rather than axioms on classical bargaining solutions. Instead of Consistency of Resource Allocation across Dimension (CONRAD)[Roemer (1986, 1988)], which is essentially equivalent to the axiom of Welrfarism [Roemer (1988)], we introduce a weaker axiom, Consistency w.r.t. Technological Innovations (CTI), so that the non-welfaristic characterizations of bargaining solutions in the production economies are provided. By the characterizations, we can classify the three bargaining solutions (the Nash, the Kalai-Smorodinsky, and the Egalitarian solutions)from the viewpoint of responsibility and compensation discussed by Dwokin (1981, 1981a).

Suggested Citation

  • Naoki Yoshihara, 2000. "Characterizations of Bargaining Solutions in Production Economies with Unequal Skills," Discussion Paper Series a396, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hituec:a396
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    References listed on IDEAS

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    1. Hervé Moulin, 1990. "Joint Ownership of a Convex Technology: Comparison of Three Solutions," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 439-452.
    2. John E. Roemer, 1986. "Equality of Resources Implies Equality of Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 751-784.
    3. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
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    5. Fleurbaey, Marc & Maniquet, Francois, 1996. "Fair allocation with unequal production skills: The No Envy approach to compensation," Mathematical Social Sciences, Elsevier, vol. 32(1), pages 71-93, August.
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    7. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    8. John P. Conley & Simon Wilkie & Richard P. McLean, 1996. "Reference functions and possibility theorems for cardinal social choice problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(1), pages 65-78.
    9. Chen, Mark A. & Maskin, Eric S., 1999. "Bargaining, Production, and Monotonicity in Economic Environments," Journal of Economic Theory, Elsevier, vol. 89(1), pages 140-147, November.
    10. Simon Wilkie & Dimitrios Diamantaras, 1996. "On the set of Pareto efficient allocations in economies with public goods (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 371-379.
    11. Roemer, John E., 1988. "Axiomatic bargaining theory on economic environments," Journal of Economic Theory, Elsevier, vol. 45(1), pages 1-31, June.
    12. Howe, Roger, 1987. "Sections and extensions of concave functions," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 53-64, February.
    13. Gines, M. & Marhuenda, F., 2000. "Welfarism in Economic Domains," Journal of Economic Theory, Elsevier, vol. 93(2), pages 191-204, August.
    14. Moulin, Herve & Roemer, John, 1989. "Public Ownership of the External World and Private Ownership of Self," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 347-367, April.
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    Cited by:

    1. Lombardi, Michele & Yoshihara, Naoki, 2010. "Alternative characterizations of the proportional solution for nonconvex bargaining problems with claims," Economics Letters, Elsevier, vol. 108(2), pages 229-232, August.
    2. Yoshihara, Naoki, 2010. "Class and exploitation in general convex cone economies," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 281-296, August.
    3. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially Honest Nash Implementation: A Full Characterization," MPRA Paper 48234, University Library of Munich, Germany, revised 11 Jul 2013.
    4. Xu, Yongsheng & Yoshihara, Naoki, 2006. "Alternative characterizations of three bargaining solutions for nonconvex problems," Games and Economic Behavior, Elsevier, vol. 57(1), pages 86-92, October.
    5. Roberto Veneziani & Naoki Yoshihara, 2010. "Exploitation and Profits: A General Axiomatic Approach in Convex Economies with Heterogeneous Agents," UMASS Amherst Economics Working Papers 2010-12, University of Massachusetts Amherst, Department of Economics.
    6. Yongsheng Xu & Naoki Yoshihara, 2008. "The Behaviour Of Solutions To Bargaining Problems On The Basis Of Solidarity," The Japanese Economic Review, Japanese Economic Association, vol. 59(1), pages 133-138.

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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