Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5102529 | Physica A: Statistical Mechanics and its Applications | 2017 | 12 Pages |
Abstract
We study the classical bargaining problem and its two canonical solutions, (Nash and Kalai-Smorodinsky), from a novel point of view: we ask for stability of the solution if both players are able distort the underlying bargaining process by reference to a third party (e.g. a court). By exploring the simplest case, where decisions of the third party are made randomly we obtain a stable solution, where players do not have any incentive to refer to such a third party. While neither the Nash nor the Kalai-Smorodinsky solution are able to ensure stability in case reference to a third party is possible, we found that the Kalai-Smorodinsky solution seems to always dominate the stable allocation which constitutes novel support in favor of the latter.
Keywords
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Physical Sciences and Engineering
Mathematics
Mathematical Physics
Authors
Jakob Kapeller, Stefan Steinerberger,