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Monotonicity with Respect to the Disagreement Point and Risk Sensitivity of a New Solution to Nash Bargaining Problems

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  • Lahiri Somdeb

Abstract

We propose a solution to the bargaining problem which responds appropriately to certain changes in the disagreement point, for a fixed feasible set. If di increases, while for j=/i, dj remains constant, our solution recommends an increase in agent i’s payoff, in agreement with intention. We also show that an increase in risk aversion is to the player’s own advantage and to the disadvantage of the opponent in the two person case; to the disadvantage of all opponents in the multi-person generalization.

Suggested Citation

  • Lahiri Somdeb, 1988. "Monotonicity with Respect to the Disagreement Point and Risk Sensitivity of a New Solution to Nash Bargaining Problems," IIMA Working Papers WP1988-12-01_00851, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp00851
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