Duality, area-considerations, and the Kalai–Smorodinsky solution

Abstract

We introduce a new solution concept for 2-person bargaining problems, which can be considered as the dual of the Equal-Area solution (EA) (see Anbarcı and Bigelow (1994)). Hence, we call it the Dual Equal-Area solution (DEA). We show that the point selected by the Kalai–Smorodinsky solution (see Kalai and Smorodinsky (1975)) lies in between those that are selected by EA and DEA. We formulate an axiom–area-based fairness–and offer three characterizations of the Kalai–Smorodinsky solution in which this axiom plays a central role. © 2016 Elsevier B.V.