On the Sensitivity Matrix of the Nash Bargaining Solution

J.C. Engwerda

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Abstract

In this note we provide a characterization of a subclass of bargaining problems for which the Nash solution has the property of disagreement point monotonicity.While the original d-monotonicity axiom and its stronger notion, strong d-monotonicity, were introduced and discussed by Thomson [15], this paper introduces local strong d-monotonicity and derives a necessary and sufficient condition for the Nash solution to be locally strong d-monotonic.This characterization is given by using the sensitivity matrix of the Nash bargaining solution w.r.t. the disagreement point d.Moverover, we present a sufficient condition for the Nash solution to be strong d-monotonic.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages14
Volume2006-107
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-107

Keywords

  • Nash bargaining solution
  • d-monotonicity
  • diagonally dominant Stieltjes matrix

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    Engwerda, J. C. (2006). On the Sensitivity Matrix of the Nash Bargaining Solution. (CentER Discussion Paper; Vol. 2006-107). Macroeconomics.