Econometrica: Oct 1977, Volume 45, Issue 7

Two-Person Bargaining Problems and Comparable Utility

https://doi.org/0012-9682(197710)45:7<1631:TBPACU>2.0.CO;2-U
p. 1631-1637

Roger B. Myerson

Four conditions are shown to imply together that a solution function for two-person bargaining problems must equalize gains in some ordinal utility scales. These conditions are: weak Pareto optimality, strong individual rationality, composition, and uniformity. The composition condition relates to sequences of bargaining problems. The uniformity condition requires that the solution function must be invariant under enough ordinal utility transformationsto move any threat point to the origin.

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