Linking Strategic Interaction and Bargaining Theory: The Harsanyi-Schelling Debate on the Axiom of Symmetry

Of John Nash’s two contributions to game theory, it is the concept of the equilibrium point that has been assessed as quintessential to economics.1 This can be attributed to the fact that it exemplifi es the dominant view among economists that the maximization postulate and the assumptions of perfect rationality and complete information have both normative and descriptive value. This reasoning, however, is not so readily applicable when it comes to the bargaining model proposed by Nash in the early 1950s. One discrepancy is, for instance, the removal of the time aspect that is a feature of the model, which greatly differs from the standard economic approach to bargaining. Moreover, and more generally, the set of axioms proposed by Nash to determine a solution to the bargaining