A metric on solutions of the bargaining problem

Abstract

We consider the classic bargaining problem: two players have to agree on a `fair' division $(x,y) \in Ω\subset \mathbb{R}_{\geq 0}^2$ which results in Player 1 receiving $x$ and Player 2 receiving $y$. The usual approach to this problem has been to impose a number of desirable axioms that a fair division should have and then conclude that the solution is uniquely defined by the axioms. We take an orthogonal view, avoid the discussion of axioms, and ask whether different and contradicting axioms may give rise to similar solutions. To this end, we define a natural metric on the space of solutions to the bargaining problem. The metric shows a strong internal consistency between the three celebrated solutions due to Nash (1950), Raiffa (1953) and Kalai-Smorodinsky (1975). It identifies problematic cases for the Utilitarian solution and the Perles-Maschler solution (1981). The area monotonic solution of Anbarci-Bigelow (1988) is shown to be nearly perfectly located on a shortest path from Nash to Kalai-Smorodinsky.