Nash bargaining in ordinal environments

Özgür Kıbrıs

Review of Economic Design, 2012, vol. 16, issue 4, 269-282

Abstract: We analyze the implications of Nash’s (Econometrica 18:155–162, 1950 ) axioms in ordinal bargaining environments; there, the scale invariance axiom needs to be strenghtened to take into account all order-preserving transformations of the agents’ utilities. This axiom, called ordinal invariance, is a very demanding one. For two-agents, it is violated by every strongly individually rational bargaining rule. In general, no ordinally invariant bargaining rule satisfies the other three axioms of Nash. Parallel to Roth (J Econ Theory 16:247–251, 1977 ), we introduce a weaker independence of irrelevant alternatives (IIA) axiom that we argue is better suited for ordinally invariant bargaining rules. We show that the three-agent Shapley–Shubik bargaining rule uniquely satisfies ordinal invariance, Pareto optimality, symmetry, and this weaker IIA axiom. We also analyze the implications of other independence axioms. Copyright Springer-Verlag 2012

Keywords: Bargaining; Shapley–Shubik rule; Ordinal invariance; Independence of irrelevant alternatives; Brace; C78 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10058-012-0134-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reecde:v:16:y:2012:i:4:p:269-282

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

DOI: 10.1007/s10058-012-0134-6

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().