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Theory and Decision

, Volume 55, Issue 4, pp 359–389 | Cite as

Bargaining Solutions as Social Compromises

  • Andreas Pfingsten
  • Andreas Wagener
Article

Abstract

A bargaining solution is a social compromise if it is metrically rationalizable, i.e., if it has an optimum (depending on the situation, smallest or largest) distance from some reference point. We explore the workability and the limits of metric rationalization in bargaining theory where compromising is a core issue. We demonstrate that many well-known bargaining solutions are social compromises with respect to reasonable metrics. In the metric approach, bargaining solutions can be grounded in axioms on how society measures differences between utility allocations. Using this approach, we provide an axiomatic characterization for the class of social compromises that are based on p-norms and for the attending bargaining solutions. We further show that bargaining solutions which satisfy Pareto Optimality and Individual Rationality can always be metrically rationalized.

bargaining solutions metric rationalizability social compromise 

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Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • Andreas Pfingsten
    • 1
  • Andreas Wagener
    • 1
  1. 1.Institut für Kreditwesen, Universitätstr, 14-16Westfalische Wilhelms-Universität MünsterGermany. E-mail

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