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The (Stabilized) Nash Bargaining Solution as a Principle of Distributive Justice

  • MICHAEL MOEHLER (a1)
Abstract

It is argued that the Nash bargaining solution cannot serve as a principle of distributive justice because (i) it cannot secure stable cooperation in repeated interactions and (ii) it cannot capture our moral intuitions concerning distributive questions. In this article, I propose a solution to the first problem by amending the Nash bargaining solution so that it can maintain stable cooperation among rational bargainers. I call the resulting principle the stabilized Nash bargaining solution. The principle defends justice in the form ‘each according to her basic needs and above this level according to her relative bargaining power’. In response to the second problem, I argue that the stabilized Nash bargaining solution can serve as a principle of distributive justice in certain situations where moral reasoning is reduced to instrumental reasoning. In particular, I argue that rational individuals would choose the stabilized Nash bargaining solution in Rawls’ original position.

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John Nash Jr., ‘The Bargaining Problem’, Econometrica 18 (1950), pp. 155–62

Ehud Kalai , ‘Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons’, Econometrica 45 (1977), pp. 1623–30

Ehud Kalai and Meir Smorodinsky , ‘Other Solutions to Nash's Bargaining Problem’, Econometrica 43 (1975), pp. 513–18

Alvin Roth , ‘An Impossibility Result Concerning n-Person Bargaining Games’, International Journal of Game Theory 8 (1979), pp. 129–32

Harsanyi, ‘Approaches to the Bargaining Problem Before and After the Theory of Games: A Critical Discussion of Zeuthen's, Hicks’, and Nash's Theories’, Econometrica 24 (1956), pp. 144–57

Ariel Rubinstein , ‘Perfect Equilibrium in a Bargaining Model’, Econometrica 50 (1982), pp. 97109

Erik Angner , ‘Revisiting Rawls: A Theory of Justice in the Light of Levi's Theory of Decision’, Theoria 70 (2004), pp. 321

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Utilitas
  • ISSN: 0953-8208
  • EISSN: 1741-6183
  • URL: /core/journals/utilitas
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