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Bargaining and Justice

Published online by Cambridge University Press:  13 January 2009

David Gauthier
David Gauthier
Affiliation:
Philosophy, University of Pittsburgh
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Extract

My concern in this paper is with the illumination that the theory of rational bargaining sheds on the formulation of principles of justice. I shall first set out the bargaining problem, as treated in the theory of games, and the Nash solution, or solution F. I shall then argue against the axiom, labeled “independence of irrelevant alternatives,” which distinguished solution F, and also against the Zeuthen model of the bargaining process which F formalizes.

Type
Research Article
Information
Social Philosophy and Policy , Volume 2 , Issue 2 , Spring 1985 , pp. 29 - 47
Copyright
Copyright © Social Philosophy and Policy Foundation 1985

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References

1 See Nash, J. F., “The Bargaining Problem,” Econometrica, vol. 18 (1950), pp. 155–162.CrossRefGoogle Scholar See also Roth, Alvin E., Axiomatic Models of Bargaining (Berlin:Springer Verlag, 1979), pp. 4–19.CrossRefGoogle Scholar

2 See Zeuthen, Frederik, Problems of Monopoly and Economic warfare (London: Routledge, 1930), pp. 104–121.Google Scholar For the relation between Nash and Zeuthen, see Harsanyi, John F., “Approaches to the Bargaining Problem Before and After the Theory of Games,” Econometrica, vol. 24 (1956), pp. 144–156.CrossRefGoogle Scholar

3 See Kalai, Ehud and Smorodinsky, Meir, “Other Solutions to Nash's Bargaining Problem,” Econometrica, vol. 43 (1975), pp. 513–518.CrossRefGoogle Scholar

4 See Roth, Axiomatic Models, pp. 98–107.

5 Solution G' appears (although not under that label) initially in “Rational Cooperation,” Noûs, vol. 8 (1974), pp. 53–65. See also “The Social Contract: Individual Decision or Collective Bargain?,” in Hooker, C. A., Leach, J. J., and McClennen, E. F., eds., Foundations and Applications of Decision Theory (Dordrecht: Reidel, 1978), vol. 2, pp. 47–67Google Scholar.

6 For the difference principle, see Rawls, John, A Theory of Justice (Cambridge, Mass: Harvard, 1971), especially pp. 75–83.Google Scholar

7 The quotation is from Rawls, A Theory of Justice, p. 27. The views to be rebutted are advocated in particular by John C. Harsanyi; see especially “Can the Maximum Principle Serve as a Basis for Morality? A Critique of John Rawls's Theory,” in Essays on Ethics, Social Behaviour, and Scientific Explanation (Dordrecht: Reidel, 1976), pp. 37–63.

8 “Justice as Fairness” apeared in the Philosophical Review, vol. 67 (1958), pp. 164–194. Rawls's Kantianism is emphasized in A Theory of Justice, pp. 251–257, and in “Kantian Constructivism in Moral Theory,” Journal of Philosophy, vol. 77 (1980), pp. 515–572.

9 The full account of this theory will appear in Morals by Agreement, Oxford, in press.

10 A Von Neumann-Morgenstern utility-function is one having the expected utility property: see Harsanyi, J. C., Rational Behavior and Bagaining Equilibrium in Games and Social Situations (Cambridge: Cambridge University Press, 1977), p. 34.CrossRefGoogle Scholar

11 See Sen, Amartya K., Collective Choice and Social Welfare (San Francisco: Holden–Day, 1970), p. 17.Google Scholar For the Arrovian “independence of irrelevant alternatives” condition, see Arrow, Kenneth J., Social Choice and Individual Values, 2nd edition (New York: Wiley, 1963), pp. 26–28.Google Scholar

12 Rawls, A Theory of Justice, pp. 62, 83.

13 See note 7 for reference.

14 Note the absence of the decision process from the argument of “Kantian Constructivism in Moral Theory.”

15 Elster, Jon, Ulysses and the Sirens (Cambridge: Cambridge University Press, 1979), p. 10.Google Scholar

16 Perhaps the best statement of Harsanyi's theory is in “Morality and the Theory of Rational Behaviour,” in Amartya, Sen and Bernard, Williams, eds., Utilitarianism and Beyond (Cambridge: Cambridge University Press, 1982), pp. 39–62Google Scholar (reprinted from Social Research, vol. 4 (1977)).

17 Harsanyi, Rational Behavior and Bargaining Equilibrium…, p. 50.

18 Rawls, A Theory of Justice, p. 4.

19 Rawls, A Theory of Justice, p. 139.

20 I endeavor to show this in Morals by Agreement.

21 “I propose to consider ethics, also, as a branch of the general theory of rational behavior, since ethical theory can be based on axioms which represent specializations of some of the axioms used in decision theory…” Harsanyi, “Advances in Understanding Rational Behavior”, in Essays on Ethics…, p. 97.

22 Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974), p. 33.Google Scholar

23 Rawls, A Theory of Justice, p. 27.