On the consistency of data with bargaining theories
Abstract
We develop observable restrictions of well known theories of bargaining over money. We suppose that we observe a finite data set of bargaining outcomes, including data on allocations and disagreement points, but no information on utility functions. We ask when a given theory could generate the data. We show that if the disagreement point is fixed and symmetric, the Nash, utilitarian, and egalitarian max-min bargaining solutions are all observationally equivalent. Data compatible with these theories are, in turn, characterized by the property of co-monotonicity of bargaining outcomes. We establish different tests for each of the theories under consideration in the case in which the disagreement point can be variable. Our results are readily applicable, outside of the bargaining framework, to testing the tax code for compliance with the principle of equal loss.
Additional Information
© 2014 Christopher P. Chambers and Federico Echenique. Licensed under the Creative Commons Attribution-NonCommercial License 3.0. Submitted 2011-10-18. Final version accepted 2012-11-24. Available online 2012-11-24. We are grateful to Thomas Demuynck, Bram De Rock, Diego Dominguez, Kfir Eliaz, Ivana Komunjer, Cesar Martinelli, and William Thomson for comments and suggestions. We want to especially thank the co-editor Martin Osborne and three anonymous referees, for many improvements on the first draft.Attached Files
Published - TE1095.pdf
Files
Name | Size | Download all |
---|---|---|
md5:81120ce9d1aa23cf40c7bfc4583ef4de
|
267.0 kB | Preview Download |
Additional details
- Eprint ID
- 44189
- Resolver ID
- CaltechAUTHORS:20140307-082628059
- Created
-
2014-03-07Created from EPrint's datestamp field
- Updated
-
2021-11-10Created from EPrint's last_modified field