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The Nash solution is more utilitarian than egalitarian

Shiran Rachmilevitch

Theory and Decision, 2015, vol. 79, issue 3, 463-478

Abstract: I state and prove formal versions of the claim that the Nash (Econometrica 18: 155–162, 1950 ) bargaining solution creates a compromise between egalitarianism and utilitarianism, but that this compromise is “biased”: the Nash solution puts more emphasis on utilitarianism than it puts on egalitarianism. I also extend the bargaining model by assuming that utility can be transferred between the players at some cost (the transferable and non-transferable utility models are polar cases of this more general one, corresponding to the cases where the transfer cost is zero and infinity, respectively); I use the extended model to better understand the connections between egalitarianism and utilitarianism. Copyright Springer Science+Business Media New York 2015

Keywords: Bargaining; Egalitarianism; Nash solution; Utilitarianism (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11238-014-9477-5

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