Axiomatic bargaining theory on economic environments
Axiomatic bargaining theory is reexamined by focusing upon the economic exchange environment instead of the traditional utility possibility set. It is argued that the axioms of the traditional theory impose stronger restrictions than can be supported by their motivating economic intuitions. Weaker alternative axioms, making explicit use of economic information, are used to characterize the standard bargaining solutions. A key idea is to impose consistency of the solution with respect to changes in the dimension of the commodity space. Even these weaker economic axioms, however, may be unrealistic restrictions to impose on the bargaining solution in the context of many economic bargaining problems.
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