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Individual rationality and bargaining

Diskin, Abraham and Felsenthal, Dan S. (2007) Individual rationality and bargaining. Public Choice, 133 (1-2). pp. 25-29. ISSN 1573-7101

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Abstract

We argue that Nash’s solution to the bargaining problem should be modified such that it will be based on a New Reference Point (NRP). Such a point is needed so that a player is not considered ‘individually rational’ if he accepts an agreement that provides him with a utility lower than the minimal utility he can derive from any Pareto optimal agreement, or if he accepts an agreement that provides him a utility lower than the one he can obtain by unilateral action. The employment of such NRP requires modifying two axioms and hence leads to a new proposed solution.

Item Type: Article
Official URL: http://www.springerlink.com/openurl.asp?genre=jour...
Additional Information: © 2007 Springer
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory
Sets: Research centres and groups > Centre for Philosophy of Natural and Social Science (CPNSS)
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 23 Jun 2009 11:16
URL: http://eprints.lse.ac.uk/24233/

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