No. 572: Two-stage Bargaining Solutions
September 1, 2006
We introduce and characterize a new class of bargaining solutions: those which can be obtained by sequentially applying two binary relations to eliminate alternatives. As a by-product we obtain as a particular case a partial characterization result by Zhou (Econometrica, 1997) of an extension of the Nash axioms and solution to domains including non-convex problems, as well as a complete characterizations of solutions that satisfy Pareto optimality, Covariance with positive affine transformations, and Independence of irrelevant alternatives.
J.E.L classification codes: C72, D44
Keywords:Bargaining, Non-convex problems, Nash bargaining solution