A New Insight into Three Bargaining Solutions in Convex Problems
We reconsider the three well-known solutions: the Nash, the egalitarian and the Kalai-Smorodinsky solutions, to the classical domains of convex bargaining problems. A new proof for the Nash solution that highlights the crucial role the axiom Contraction Independence plays is provided. We also give new axiomatic characterizations for both the egalitarian and the Kalai-Smorodinsky solutions. Our results focus on both contraction and expansion independence properties of bargaining problems and, as a consequence, some new insights on the three solutions from the perspective of rational choice may be derived.
|Date of creation:||Jul 2004|
|Date of revision:|
|Note:||April 2004, Bibliography: p. 11-12|
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