On Iterated Nash Bargaining Solutions

Qin Cheng-Zhong (), Guofu Tan and Wong Adam C. L. ()
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Qin Cheng-Zhong: Department of Economics, University of California, Santa Barbara, CA 93106, USA
Wong Adam C. L.: Department of Economics, Lingnan University, Hong Kong, Hong Kong

The B.E. Journal of Theoretical Economics, 2023, vol. 23, issue 2, 697-721

Abstract: This paper introduces a family of domains of bargaining problems allowing for non-convexity. For each domain in this family, single-valued bargaining solutions satisfying the Nash axioms are explicitly characterized as solutions of the iterated maximization of Nash products weighted by the row vectors of the associated bargaining weight matrices. This paper also introduces a simple procedure to standardize bargaining weight matrices for each solution into an equivalent triangular bargaining weight matrix, which is simplified and easy to use for applications. Furthermore, the standardized bargaining weight matrix can be recovered from bargaining solutions of simple problems. This recovering result provides an empirical framework for determining the bargaining weights.

Keywords: bargaining problem; non-convexity; Nash product; iterated solution; weight matrix (search for similar items in EconPapers)
JEL-codes: C71 C78 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/bejte-2022-0095

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