Bargaining with Intertemporal Maximin Payoffs

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7471

Classification and Topics

• Classification: Wirtschaft
• Subject: social choice ; axiomatic bargaining theory ; economic environment ; monotonicity ; dynamics ; sustainability ; intergenerational equity ; maximin

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Martinet, Vincent ; Gajardo, Pedro ; De Lara, Michel
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/198831
• Last update: 10.03.2025, 11:42 AM CET