Artikel
Judicial precedent as a dynamic rationale for axiomatic bargaining theory
Axiomatic bargaining theory (e.g., Nash's theorem) is static. We attempt to provide a dynamic justification for the theory. Suppose a Judge or Arbitrator must allocate utility in an (infinite) sequence of two-person problems; at each date, the Judge is presented with a utility possibility set in the nonnegative orthant in two-dimensional Euclidean space. He/she must choose an allocation in the set, constrained only by Nash's axioms, in the sense that a penalty is paid if and only if a utility allocation is chosen at date T which is inconsistent, according to one of the axioms, with a utility allocation chosen at some earlier date. Penalties are discounted with t, and the Judge chooses any allocation, at a given date, that minimizes the penalty he/she pays at that date. Under what conditions will the Judge's chosen allocations converge to the Nash allocation over time? We answer this question for three canonical axiomatic bargaining solutions: Nash's, Kalai-Smorodinsky's, and the 'egalitarian' solution, and generalize the analysis to a broad class of axiomatic models.
- Sprache
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Englisch
- Erschienen in
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Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 6 ; Year: 2011 ; Issue: 2 ; Pages: 289-310 ; New Haven, CT: The Econometric Society
- Klassifikation
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Wirtschaft
Game Theory and Bargaining Theory: General
Bargaining Theory; Matching Theory
- Thema
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Axiomatic bargaining theory
judicial precedent
dynamic foundations
Nash's bargaining solution
- Ereignis
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Geistige Schöpfung
- (wer)
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Fleurbaey, Marc
Roemer, John E.
- Ereignis
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Veröffentlichung
- (wer)
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The Econometric Society
- (wo)
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New Haven, CT
- (wann)
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2011
- DOI
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doi:10.3982/TE588
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Artikel
Beteiligte
- Fleurbaey, Marc
- Roemer, John E.
- The Econometric Society
Entstanden
- 2011