Risk Sensitivity in Bargaining with More than Two Participants

By Lars Tyge Nielsen

Journal of Economic Theory 32 (1984), 371-376

Abstract

In two-person bargaining over riskless outcomes where the outcome is chosen according to the Nash solution or the Kalai-Smorodinsky solution, an increase in a player's risk aversion is to the advantage of the opponent. It is shown in this note that for the n-person Nash solution, an increase in risk aversion is to the player's own disadvantage but needs not be advantageous to all the opponents. For the n-person Kalai-Smorodinsk solution, the increase is to the player's own disadvantage and to the advantage of all the opponents.

Journal of Economic Literature Classification Numbers: 024, 025, 026