Nash demand game and the Kalai-Smorodinsky solution

Nejat Anbarci () and John Boyd ()

Working Papers from Deakin University, Department of Economics

Abstract: We introduce two new variations on the Nash demand game. One, like all known Nash-like demand games so far, has the Nash solution outcome as its equilibrium outcome. In the other, the range of solutions depends on an exogenous breakdown probability; surprisingly, the Kalai-Smorodinsky outcome proves to be the most robust equilibrium outcome. While the Kalai-Smorodinsky solution always finishes on top, there is no possible general ranking among the remaining solution concepts considered; in fact, the rest of the solution concepts take their turns at the bottom at various bargaining problems, depending on the specifics of the bargaining setup.

Date: 2008-10-21
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http://dx.doi.org/10.1016/j.geb.2010.07.009

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Journal Article: Nash demand game and the Kalai-Smorodinsky solution (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:dkn:econwp:eco_2008_11

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