Relative Disagreement-Point Monotonicity of Bargaining Solutions

Prominent bargaining solutions are disagreement-point monotonic. These solutions’ disagreement-point monotonicity ranking, on the other hand, is impossible to establish. In a large class of bargaining problems, however, a ranking of the relative disagreement-point monotonicity of these prominent bargaining solutions can be obtained. Using the ‘Constant Elasticity of Substitution’ class of bargaining problems, and regardless of the concavity of the Pareto frontier and of the increase in the disagreement point, we find that the Egalitarian solution is most monotonic with respect to changes in disagreement payoffs, followed by the Nash solution. The Equal Sacrifice solution turns out to be the least monotonic, followed by the Kalai/Smorodinsky solution. JEL classification number : C72.