Lecture: Nejat Anbarcı

Nash Bargaining Theory: Axiomatic and Strategic Approaches

This lecture revisits Nash bargaining theory within the broader agenda initiated by John Nash and often referred to as the Nash program: for given axiomatic bargaining solution, it aims to derive cooperative outcomes as equilibrium results of explicit strategic interaction (the Nash program succeeds in providing microfoundations for a range of solution concepts, while also revealing where axiomatic prescriptions are sensitive to timing, information, and institutional detail). We first restate the axiomatic foundations of the Nash solution—Pareto efficiency, symmetry, scale invariance, and independence of irrelevant alternatives—and contrast them with alternative cooperative solutions that relax or replace these axioms. Prominent among these are the Kalai-Smorodinsky solution (replacing independence of irrelevant alternatives with monotonicity), the Egalitarian solution (equalizing gains), and weighted or asymmetric variants that incorporate power and entitlement considerations. We also discuss later axiomatic solution concepts.

Location: Sabancı Üniversitesi - Karaköy Minerva Han,  Bankalar Caddesi No:2, Karaköy, 34420 İstanbul