Symmetrically pairwise-bargained allocations in an assignment market (Q760345)

Consider the problem of optimally assigning workers to jobs, students to colleges, or the pairing of men and women in marriage. The pairing creates surplus value measured by transferable utility. The optimal assignment of such an assignment game is known to be generically unique. The division of output among optimally matched pairs of individuals however gives scope for non-trivial bargaining. For solving this problem the author suggests symmetrically pairwise-bargained (SPB) allocations which, by using a fixed-point argument, are shown to exist and to coincide with the intersection of the kernel and the core. A rebargaining process is formulated which converges to an SPB allocation if it starts at one of the end-points of the long axis of the core.