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Article: Relative responsiveness of bargaining solutions to changes in status-quo payoffs.
- Article from:
- Atlantic Economic Journal
- Article date:
- September 1, 2008
- Author:
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Introduction
It is a well-known fact that several prominent bargaining solutions--such as the Nash, Kalai/Smorodinsky, equal gains, and equal sacrifice solutions, which will be defined rigorously in the next section--are responsive to changes in status-quo (i.e., disagreement or fallback) payoffs in that when an agent's status-quo payoff increases, his solution payoff either stays the same or increases) That is, when an Agent i's status-quo payoff increases while that of the other agent stays the same, Agent i is not worse off as a result; in many cases he is better off and consequently the other agent is worse off. The next natural question is "are some of the ...