Mechanisms supporting the Kalai--Smorodinsky solution. (Q1867830)

In meta-bargaining theory we consider (two-person) bargaining games and we assume that the agents want to apply two possibly different bargaining solutions. A mechanism is a function which assigns an allocation to every bargaining game and every pair of bargaining solutions. \textit{Y. Chun} [The equal-loss principle for bargaining problems. Econ. Lett. 26, 103--106 (1988)] has modified the mechanism introduced by \textit{E. van Damme} [J. Econ. Theory 38, 78--100 (1986; Zbl 0647.90106)] and proposed a mechanism under which only the Kalai-Smorodinsky solution is (vD) optimal. The mechanism fails to satisfy Pareto-optimality and other properties. The author introduces a modification of Chun's mechanism and applies both the non-cooperative approach and the cooperative approach. The author shows that Kalai Smorodinsky solution still the only (vD) optimal solution while it satisfies some desirable properties Chun's mechanism does not. Hence the author's mechanism has support from the cooperative as well as from the non-cooperative point of view.