The Midpoint-Constrained Egalitarian Bargaining Solution

Dominik Karos and Shiran Rachmilevitch
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Dominik Karos: RS: GSBE ETBC, Microeconomics & Public Economics, RS: GSBE Theme Conflict & Cooperation

No 7, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: A payoff allocation in a bargaining problem is midpoint dominant if each player obtains at least one n-th of her ideal payoff. The egalitarian solution of a bargaining problem may select a payoff configuration which is not midpoint dominant. We propose and characterize the solution which selects for each bargaining problem the feasible allocation that is closest to the egalitarian allocation, subject to being midpoint dominant. Our main axiom, midpoint monotonicity, is new to the literature; it imposes the standard monotonicity requirement whenever doing so does not result in selecting an allocation which is not midpoint dominant. In order to prove our main result we develop a general extension theorem for bargaining solutions that are order-preserving with respect to any order on the set of bargaining problems.

JEL-codes: C71 C78 D61 D63 (search for similar items in EconPapers)
Date: 2018-03-29
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2018007

DOI: 10.26481/umagsb.2018007

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