INSTITUTE OF MATHEMATICAL ECONOMICS

Anke Gerber

Working-Paper No. 278

October 1997

Abstract

Following an idea due to Thomson (Journal of Economic Theory, 25 , 1981, 431-441) we examine the role of reference functions in the axiomatic approach to the solution of bargaining problems with claims. A reference function is a means of summarizing essential features of a bargaining problem. Axioms like Independence of Irrelevant Alternatives and Monotonicity are then reformulated with respect to this reference function. Under some mild conditions on the reference function we obtain characterizations of different parametrized classes of solutions. We present several examples of reference functions and thereby recover most of the well known solutions to bargaining problems with claims.

Keywords: Bargaining, Claims, Reference Functions