A BEJTE Contributions article.

Abstract

We apply the von Neumann-Morgenstern stable set to the n-player cake division problem. Only time-preferences á la Rubinstein (1982) are assumed. The stable set is defined with respect to the following dominance relation: x dominates y if there is a player who prefers x over y even with one period lag. The Nash bargaining solution is characterized in the language of stable sets. Through the characterization, we establish the existence and uniqueness of the Nash solution.

Submitted: August 12, 2005 · Accepted: September 1, 2007 · Published: November 14, 2007

Recommended Citation

Kultti, Klaus and Vartiainen, Hannu (2007) "Von Neumann-Morgenstern Stable Set Bridges Time-Preferences to the Nash Solution," The B.E. Journal of Theoretical Economics: Vol. 7 : Iss. 1 (Contributions), Article 41.
Available at: http://www.bepress.com/bejte/vol7/iss1/art41