Bargaining with endogenous disagreement: the extended Kalai-Smorodinsky solution

Irem Bozbay , Franz Dietrich (1) , Hans Peters

1 CERSES - UMR 8137 - Centre de recherche sens, ethique, société

Following Vartiainen (2007) we consider bargaining problems in which no exogenous disagreement outcome is given. A bargaining solution assigns a pair of outcomes to such a problem, namely a compromise outcome and a disagreement outcome: the disagreement outcome may serve as a reference point for the compromise outcome, but other interpretations are given as well. For this framework we propose and study an extension of the classical Kalai-Smorodinsky bargaining solution. We identify the (large) domain on which this solution is single-valued, and present two axiomatic characterizations on subsets of this domain.

Mots clés: Axiomatic bargaining; endogenous disagreement outcome; extended Kalai-Smorodinsky solution

Domaines: Economies et finances

Irem Bozbay, Franz Dietrich, Hans Peters. Bargaining with endogenous disagreement: the extended Kalai-Smorodinsky solution. Games and Economic Behavior, 2012, 74, pp.407-417. ⟨10.1016/j.geb.2011.06.007⟩. ⟨halshs-00977992⟩