On the relevance of alternatives in bargaining: generalized average pay-off solutions

Abstract

We generalize the average pay-off solution proposed by Anbarci (Can J Econ 28:675-682, 1995), which depends on all the alternatives, and show that the Nash and Kalai-Smorodinsky solutions are limits of generalized average pay-off solutions. We formalize the notion of relevant alternatives and compare solutions in terms of the relevance of alternatives.