The Econometric Society An International Society for the Advancement of Economic Theory in its Relation to Statistics and Mathematics
Home Contacts
Econometrica

New Journals

Econometrica
Editorial Board
Journal News

Monograph Series

September 1994 - Volume 62 Issue 5 Page 1161 - 1178


p.1161


Generalized Ginis and Cooperative Bargaining Solutions

Charles Blackorby
Walter Bossert
David Donaldson

Abstract

This paper introduces and characterizes a new class of solutions to cooperative bargaining problems that can be rationalized by generalized Gini orderings defined on the agents' utility gains. Generalized Ginis are orderings which can be represented by quasi-concave, nondecreasing functions that are linear in rank-ordered subspaces of Euclidean $n$-space. Our characterization of (multi-valued) generalized Gini bargaining solutions is based on a linear invariance requirement in addition to some standard conditions. Linear invariance requires that if the feasible set is changed by adding a constant to one agent's component of each vector of the feasible set (without changing the agent's rank order), the solution responds by adding the same constant to the corresponding agent's utility in the outcome of the problem. Weak linear invariance requires the solution to change in a parallel way if a constant is added to all components of each vector of the feasible set. In the two-person case, the generalized Gini bargaining solutions can be characterized by imposing weak linear invariance, whereas, for $n \geqslant 3$ agents, linear invariance is required. As a by-product of our main result, we show that the egalitarian bargaining solution is characterized if single-valuedness is required together with some of our axioms. The main focus of cooperative bargaining theory has been the characterization of single-valued solutions. The results of this paper demonstrate that relaxing this assumption enlarges the class of solutions considerably. Hence, single-valuedness is not merely an assumption of convenience but, rather, an assumption of substance.

Full content Login                                    

Note: to view the fulltext of the article, please login first and then click the "full content" button. If you are based at a subscribing Institution or Library or if you have a separate access to JSTOR/Wiley Online Library please click on the "Institutional access" button.
Prev | All Articles | Next
Go to top
Membership



Email me my password
Join/Renew
Change your address
Register for password
Require login:
Amend your profile
E-mail Alerting
The Society
About the Society
Society News
Society Reports
Officers
Fellows
Members
Regions
Meetings
Future Meetings
Past Meetings
Meeting Announcements
Google
web this site
   
Wiley-Blackwell
Site created and maintained by Wiley-Blackwell.
Comments? Contact customsiteshelp@wiley.com
To view our Privacy Policy, please click here.