Bargaining on monotonic social choice environments

Vincent Martinet, Pedro Gajardo () and Michel Lara ()
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Pedro Gajardo: Universidad Técnica Federico Santa María
Michel Lara: CERMICS, Ecole des Ponts

Theory and Decision, 2024, vol. 96, issue 2, No 2, 209-238

Abstract: Abstract Applying the solutions defined in the axiomatic bargaining theory to actual bargaining problems is a challenge when the problem is not described by its Utility Possibility Set (UPS) but as a social choice environment specifying the set of alternatives and utility profile underlying the UPS. It requires computing the UPS, which is an operational challenge, and then identifying at least one alternative that actually achieves the bargained solution’s outcome. We introduce the axioms of Independence of Non-Strongly-Efficient Alternatives (resp. Weakly) and Independence of Redundant Alternatives. A solution satisfying these axioms can be applied to a simplified problem based on any reduced set of alternatives generating the strong (resp. weak) Pareto frontier of the initial problem, without changing the outcome, making the application of bargaining solutions to actual problems easier. We compare our axioms to usual independence axioms, and discuss their consistency with usual bargaining solutions. Then, we introduce monotonicity conditions corresponding to the existence of an interest group, i.e., agents ranking the alternatives in the same order. For such monotonic social choice environments, we provide a parameterized family of alternatives that generates the Pareto frontier of the bargaining problem, in line with our previous results. Our analysis illustrates that an axiomatic approach can be useful to foster the application of bargaining solutions, in complement to usual computational methods.

Keywords: Social choice; Axiomatic bargaining theory; Alternatives; Economic environment; Pareto frontier; Monotonicity (search for similar items in EconPapers)
Date: 2024
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Working Paper: Bargaining on monotonic social choice environments (2023)
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DOI: 10.1007/s11238-023-09945-9

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