On the Sensitivity Matrix of the Nash Bargaining Solution

CentER Discussion Paper No. 2006-107

13 Pages Posted: 21 Apr 2005

See all articles by Jacob C. Engwerda

Jacob C. Engwerda

retiree

Rudy Douven

CPB Netherlands Bureau for Economic Policy Analysis; CPB Netherlands Bureau for Economic Policy Analysis

Date Written: October 2006

Abstract

In this note we provide a characterization of a subclass of bargaining problems for which the Nash solution has the property of disagreement point monotonicity.While the original d-monotonicity axiom and its stronger notion, strong d-monotonicity, were introduced and discussed by Thomson [15], this paper introduces local strong d-monotonicity and derives a necessary and sufficient condition for the Nash solution to be locally strong d-monotonic.This characterization is given by using the sensitivity matrix of the Nash bargaining solution w.r.t. the disagreement point d.Moverover, we present a sufficient condition for the Nash solution to be strong d-monotonic.

Keywords: Nash bargaining solution; d-monotonicity; diagonally dominant Stieltjes matrix

JEL Classification: C61, C62, C71, C78

Suggested Citation

Engwerda, Jacob C. and Douven, Rudy, On the Sensitivity Matrix of the Nash Bargaining Solution (October 2006). CentER Discussion Paper No. 2006-107, Available at SSRN: https://ssrn.com/abstract=706839 or http://dx.doi.org/10.2139/ssrn.706839

Jacob C. Engwerda (Contact Author)

retiree ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2174 (Phone)
+31 13 466 3280 (Fax)

Rudy Douven

CPB Netherlands Bureau for Economic Policy Analysis ( email )

P.O. Box 80510
The Hague, 2508 GM
Netherlands

HOME PAGE: http://www.cpb.nl/nl/org/homepages/rcmhd/

CPB Netherlands Bureau for Economic Policy Analysis ( email )

P.O. Box 80510
The Hague, 2508 GM
Netherlands

HOME PAGE: http://www.cpb.nl/nl/org/homepages/rcmhd/

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