Access

You are not currently logged in.

Access JSTOR through your library or other institution:

login

Log in through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Journal Article

Risk Aversion and Nash's Solution for Bargaining Games with Risky Outcomes

Alvin E. Roth and Uriel G. Rothblum
Econometrica
Vol. 50, No. 3 (May, 1982), pp. 639-647
Published by: The Econometric Society
DOI: 10.2307/1912605
Stable URL: http://www.jstor.org/stable/1912605
Page Count: 9
Were these topics helpful?
See somethings inaccurate? Let us know!

Select the topics that are inaccurate.

Cancel
  • Read Online (Free)
  • Download ($10.00)
  • Subscribe ($19.50)
  • Add to My Lists
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Risk Aversion and Nash's Solution for Bargaining Games with Risky Outcomes
Preview not available

Abstract

Recent results have shown that, for bargaining over the distribution of commodities, or other riskless outcomes, Nash's solution predicts that risk aversion is a disadvantage in bargaining. Here we consider bargaining games which may concern risky outcomes as well as riskless outcomes, and we demonstrate that, in such games, risk aversion need not always be a disadvantage in bargaining. Intuitively, for bargaining games in which potential agreements involve lotteries which have a positive probability of leaving one of the players worse off than if a disagreement had occurred, the more risk averse a player, the better the terms of the agreement which had occurred, the more risk averse a player, the better the terms of agreeement which he must be offered in order to induce him to reach an agreement, and to compensate him for the risk involved. For bargaining games whose disagreement outcome involves no uncertainty, we characterize when risk aversion is advantageous, disadvantageous, or irrelevant from the point of view of Nash's solution.

Page Thumbnails

  • Thumbnail: Page 
639
    639
  • Thumbnail: Page 
640
    640
  • Thumbnail: Page 
641
    641
  • Thumbnail: Page 
642
    642
  • Thumbnail: Page 
643
    643
  • Thumbnail: Page 
644
    644
  • Thumbnail: Page 
645
    645
  • Thumbnail: Page 
646
    646
  • Thumbnail: Page 
647
    647
Part of Sustainability