How to Add Apples and Pears: Non-Symmetric Nash Bargaining and the Generalized Joint Surplus

Abstract

We generalize the equivalence of the non-symmetric Nash bargaining solution and the linear division of the joint surplus when bargainers use different utility scales. This equivalence in the general case requires the surplus each agent receives to be expressed in compatible, or comparable, units. This result is valid in the case of bargaining over multiple-issues. In addition, we discuss the requirements on the curvatures of the agents’ utility functions, or, in other words, on the bargainers’ attitudes towards risk.Bargaining Problems, Non-Symmetric Nash Bargaining Solution, Linear Sharing