Abstract
A bid-offer–counteroffer mechanism is proposed to solve a fundamental two-person decision choice problem with two alternatives. It yields a unique subgame perfect equilibrium outcome, and leads to an intuitive overall solution that offers a reconciliation between egalitarianism and utilitarianism. We then investigate the axiomatic foundation of the solution. Furthermore, we compare it with several conventional strategic approaches to this setting.
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Ju, Y. Efficiency and compromise: a bid-offer–counteroffer mechanism with two players. Int J Game Theory 42, 501–520 (2013). https://doi.org/10.1007/s00182-012-0336-8
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DOI: https://doi.org/10.1007/s00182-012-0336-8