Bargaining with Intertemporal Maximin Payoffs
Pedro Gajardo () and
Michel De Lara ()
No 2019.02, Working Papers from FAERE - French Association of Environmental and Resource Economists
We frame sustainability problems as bargaining problems among stakeholders who have to agree on a common development path. For infinite alternatives, the set of feasible payoffs is unknown, limiting the possibility to apply classical bargaining theory and mechanisms. We define a framework accounting for the economic environment, which specifies how the set of alternatives and payoff structure underlie the set of feasible payoffs and disagreement point. A mechanism satisfying the axioms of Independence of Non-Efficient Alternatives and Independence of Redundant Alternatives can be applied to a reduced set of alternatives producing all Pareto-efficient outcomes of the initial problem, and produces the same outcome. We exhibit monotonicity conditions under which such a subset of alternatives is computable. We apply our framework to dynamic sustainability problems. We characterize a « satisficing'' decision rule achieving any Pareto-efficient outcome. This rule is renegotiation-proof and generates a time-consistent path under the axiom of Individual Rationality.
Keywords: social choice; axiomatic bargaining theory; economic environment; monotonicity; sustainability (search for similar items in EconPapers)
JEL-codes: C70 Q01 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-gth and nep-mic
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http://faere.fr/pub/WorkingPapers/Martinet_Gajardo_De%20Lara_FAERE_WP2019.02.pdf First version, 2019 (application/pdf)
Working Paper: Bargaining with intertemporal maximin payoffs (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2019.02
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