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Weakest collective rationality and the Nash bargaining solution
journal contributionposted on 2011-01-01, 00:00 authored by Nejat AnbarciNejat Anbarci, Ching-Jen SunChing-Jen Sun
We propose a new axiom, weakest collective rationality (WCR) which is weaker than both weak Pareto optimality (WPO) in Nash’s (Econometrica 18:155–162, 1950) original characterization and strong individual rationality (SIR) in Roth’s (Math Oper Res 2:64–65, 1977) characterization of the Nash bargaining solution. We then characterize the Nash solution by symmetry (SYM), scale invariance (SI), independence of irrelevant alternatives (IIA) and our weakest collective rationality (WCR) axiom.