The Midpoint-Constrained Egalitarian Bargaining Solution

Dominik Karos, Shiran Rachmilevitch

Research output: Working paperProfessional

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Abstract

A payoff allocation in a bargaining problem is midpoint dominant if each
player obtains at least one n-th of her ideal payoff. The egalitarian solution of
a bargaining problem may select a payoff configuration which is not midpoint
dominant. We propose and characterize the solution which selects for each
bargaining problem the feasible allocation that is closest to the egalitarian
allocation, subject to being midpoint dominant. Our main axiom, midpoint
monotonicity, is new to the literature; it imposes the standard monotonicity
requirement whenever doing so does not result in selecting an allocation which
is not midpoint dominant. In order to prove our main result we develop a
general extension theorem for bargaining solutions that are order-preserving
with respect to any order on the set of bargaining problems.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
DOIs
Publication statusPublished - 29 Mar 2018

Publication series

SeriesGSBE Research Memoranda
Number007

JEL classifications

  • c71 - Cooperative Games
  • c78 - "Bargaining Theory; Matching Theory"
  • d61 - "Allocative Efficiency; Cost-Benefit Analysis"
  • d63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

Keywords

  • bargaining
  • egalitarianism
  • midpoint domination

Cite this

Karos, D., & Rachmilevitch, S. (2018). The Midpoint-Constrained Egalitarian Bargaining Solution. Maastricht University, Graduate School of Business and Economics. GSBE Research Memoranda, No. 007 https://doi.org/10.26481/umagsb.2018007