The effect of decision weights in bargaining problems

• 成果类型: Article
• 署名作者: Köbberling, V; Peters, H
• 署名单位: Maastricht University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/S0022-0531(03)00009-7
• 发表日期: 2003
• 页码: 154-175
• 关键词: Bargaining; risk aversion; rank-dependent utility

摘要

Bargaining problems are considered where the preferences of the bargainers deviate from expected utility but can be modelled according to rank-dependent utility theory. Under rank-dependent utility both the utility function and the probability weighting function influence the risk attitude of a decision maker. The same definition of risk aversion leads to two forms of risk aversion: utility risk aversion and probabilistic risk aversion. The main finding is that these two forms can have surprisingly opposite consequences for bargaining solutions that exhibit a weak monotonicity property. In particular, in a large class of bargaining problems both increased utility risk aversion and decreased probabilistic risk aversion of the opponent are advantagous for a player. This is demonstrated for the Kalai-Smorodinsky bargaining solution. The Nash bargaining solution does not behave regularly in this respect. (C) 2003 Elsevier Science (USA). All rights reserved.