On the redundancy of the implicit welfarist axiom in bargaining theory

Geoffroy de Clippel

Journal of Economic Theory, 2015, vol. 157, issue C, 624-647

Abstract: Nash's characterization of his famous bargaining solution has long faced the objection of being welfarist: a bargaining situation is captured by a utility possibility set and a utility vector prevailing in case of disagreement, with no further information regarding the underlying economic environment. The present paper shows that a straightforward adaptation of Nash's axioms in a natural economic environment with lotteries does characterize his solution. A similar result holds for Kalai and Smorodinsky's [8] characterization of their solution if and only if the domain contains multiple goods. The non-welfarist characterization of the Nash solution extends to a larger class of preferences that accommodate some forms of non-expected utility.

Keywords: Bargaining; Welfarism; Nash; Kalai–Smorodinsky; Non-expected utility (search for similar items in EconPapers)
JEL-codes: C7 D7 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:157:y:2015:i:c:p:624-647

DOI: 10.1016/j.jet.2015.01.017

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