Bargaining, production, and monotonicity in economic environments

The automatic bargaining theory of J. Nash (1950. Econometrica 18. 155-162) presumes that only status quo utilities and the shape of the utility possibilities set are relevant to the bargaining outcome. Here we consider a class of economic problems for which bargaining solutions may depend on more than just utility information. (A fifty-fifty split of a single good between two bargainers is one example of such a solution.) It is shown that the requirements of Pareto efficiency), weak symmetry, and technological monotonicity (i.e., bargainers should gain from technological improvement) combine to characterize welfare egalitarianism. Journal of Economic Literature Classification Number: C78. (C) 1999 Academic Press.