Gradual bargaining is represented by an agenda: A family of increasing sets of joint utilities, parameterized by time. A solution for gradual bargaining specifies an agreement at each time. We axiomatize an ordinal solution, i.e., one that is covariant with order-preserving transformations of utility. It can be viewed as the limit of step-by-step bargaining in which the agreement of the last negotiation becomes the disagreement point for the next. The stepwise agreements may follow the Nash solution, the Kalai-Smorodinsky solution or many others and still yield the ordinal solution in the limit.
Bibliographical noteFunding Information:
Barry O’Neill’s research was supported by the Centre for Economic Learning and Social Evolution, University College London, and the Center for Rationality, Hebrew University, Jerusalem. Dov Samet’s research was supported by The Israel Institute of Business Research in the Faculty of Management at Tel Aviv University. Zvi Wiener’s research was supported by the School of Business Administration, The Hebrew University of Jerusalem. Eyal Winter wishes to thank the European Commission for support through an MTR grant. We wish to thank anonymous referees for their suggestions.
- Gradual bargaining
- Kalai-Smorodinsky solution
- Nash bargaining solution
- Ordinal solution