School of Economics and Finance

No. 572: Two-stage Bargaining Solutions

Paola Manzini , Queen Mary, University of London
Marco Mariotti , Queen Mary, University of London

September 1, 2006

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We introduce and characterize a new class of bargaining solutions: those which can be obtained by sequentially applying two binary relations to eliminate alternatives. As a by-product we obtain as a particular case a partial characterization result by Zhou (Econometrica, 1997) of an extension of the Nash axioms and solution to domains including non-convex problems, as well as a complete characterizations of solutions that satisfy Pareto optimality, Covariance with positive affine transformations, and Independence of irrelevant alternatives.

J.E.L classification codes: C72, D44

Keywords:Bargaining, Non-convex problems, Nash bargaining solution