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Relative Benefit Equilibrating Bargaining Solution and the Ordinal Interpretation of Gauthier's Arbitration Scheme

Radzvilas, Mantas (2017) Relative Benefit Equilibrating Bargaining Solution and the Ordinal Interpretation of Gauthier's Arbitration Scheme. [Preprint]

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Abstract

In 1986 David Gauthier proposed an arbitration scheme for two player
cardinal bargaining games based on interpersonal comparisons of players’ relative concessions. In Gauthier’s original arbitration scheme, players’ relative concessions are defined in terms of Raiffa-normalized cardinal utility gains, and so it cannot be directly applied to ordinal bargaining problems.
In this paper I propose a relative benefit equilibrating bargaining solution (RBEBS) for two and n-player ordinal and quasiconvex
ordinal bargaining problems with finite sets of feasible basic agreements
based on the measure of players’ ordinal relative individual advantage
gains. I provide an axiomatic characterization of this bargaining solution and discuss the conceptual relationship between RBEBS and ordinal
egalitarian bargaining solution (OEBS) proposed by Conley and Wilkie
(2012). I show the relationship between the measurement procedure for
ordinal relative individual advantage gains and the measurement procedure for players’ ordinal relative concessions, and argue that the proposed arbitration scheme for ordinal games can be interpreted as an ordinal version of Gauthier’s arbitration scheme.


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Item Type: Preprint
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Radzvilas, Mantas
Keywords: Ordinal bargaining problem, bargaining solution, arbitration scheme, relative concession, quasiconvexity, Nash equilibrium, Gauthier, ordinal egalitarian bargaining solution, Raiffa-normalization, Pareto optimality, axiomatic characterization.
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
Depositing User: DR Mantas Radzvilas
Date Deposited: 05 Aug 2017 15:39
Last Modified: 05 Aug 2017 15:39
Item ID: 13308
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
Date: July 2017
URI: http://philsci-archive.pitt.edu/id/eprint/13308

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