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On risk aversion and bargaining outcomes. (English) Zbl 1046.91075
From the authors’ abstract: “We revisit the well-known result that asserts that an increase in the degree of one’s risk aversion improves the position of one’s opponents. To this end, we apply Yaari’s dual theory of choice under risk both to Nash’s bargaining problem and to Rubinstein’s game of alternating offers. Under this theory, unlike under expected utility, risk aversion influences the bargaining outcome only when this outcome is random, namely, when the players are risk lovers. In this case, an increase in one’s degree of risk aversion increases one’s share of the pie.”
The paper refers to M. E. Yaari [Econometrica 55, 95–115 (1987; Zbl 0616.90005)], J. F. Nash [Econometrica 28, 155–162 (1950)] and to A. Rubinstein [Econometrica 50, 97–110 (1982; Zbl 0474.90092)].

91B30 Risk theory, insurance (MSC2010)
91A12 Cooperative games
91A05 2-person games
Full Text: DOI
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