Publishing house / Banach Center Publications / All volumes

Abstract

In this paper, we consider production economies with possibly unequal production skills and with the possibility of technological innovations, in which resource allocations are determined via bargaining among individuals. We define the Nash (resp. the Kalai-Smorodinsky) bargaining solution as the (bargaining) allocation rule whose utility outcomes just result in the Nash (resp. the Kalai-Smorodinsky) bargaining outcomes. Two new axioms regarding compensation for low skill agents are introduced as weak versions of the solidarity condition w.r.t. change in production skills. Then, we show that the Nash (resp. the Kalai-Smorodinsky) bargaining solution is the unique Efficient and Symmetric bargaining allocation rule satisfying both the responsibility and one of the compensation requirements.