From bargaining solutions to claims rules: a proportional approach

Identifier:  PC:2210

Handle: https://hdl.handle.net/20.500.11797/PC2210

Authors:  Peris, Josep E.; Osório Costa, Antonio Miguel; Giménez-Gómez, José Manuel

Abstract:
Is it important to negotiate on proportions rather than on numbers? To answer this question, we analyze the behavior of well-known bargaining solutions and the claims rules they induce when they are applied to a 'proportionally transformed' bargaining set SP -so-called bargaining-in-proportions set. The idea of applying bargaining solutions to claims problems was already developed in Dagan and Volij (1993). They apply the bargaining solutions over a bargaining set that is the one de ned by the claims and the endowment. A comparison among our results and theirs is provided. Keywords: Bargaining problem, Claims problem, Proportional, Constrained Equal Awards, Constrained Equal Losses, Nash bargaining solution. JEL classi fication: C71, D63, D71.