Safra, Zvi and Zilcha, Itzhak (1993) Bargaining solutions without the expected utility hypothesis. Games and Economic Behavior, 5 (2). pp. 288-306. doi:10.1006/game.1993.1017 ISSN 0899-8256.

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Abstract

We first generalize the Nash bargaining solution to the case where decision makers are not necessarily expected utility (EU) maximizers. We suggest two different approaches and show that the two extensions coincide when the preferences are of the EU and the rank dependent utility (RDU) types. The extensions differ in the case of weighted utility (WU) preferences. We also investigate the sensitivity of the extensions to changes in the degree of risk aversion. When the first extension is considered, the existing results depend on the EU assumption; for more general preferences the solutions depend on the concavity of the certainty utilities. When the second extension is considered the well-known EU results remain unchanged.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	Utility theory, Decision making -- Mathematical models
Journal or Publication Title:	Games and Economic Behavior
Publisher:	Elsevier
ISSN:	0899-8256
Official Date:	April 1993
Dates:	Date Event April 1993 Published
Volume:	5
Number:	2
Page Range:	pp. 288-306
DOI:	10.1006/game.1993.1017
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Funder:	NUR MOSHE Fund

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