The representative Nash solution for two-sided bargaining problems

An n-person bargaining situation is two-sided when participants of bargaini ng are divided into two groups and their preferences over bargained outcome s are exactly opposite to each other. This is so when the issue on the barg aining table is represented by a one dimensional set and people's preferenc es are monotonically increasing in one group and monotonically decreasing i n the other group. In this paper a solution for two-sided problems called t he Representative Nash solution is introduced and axiomatized. A strategic bargaining model is constructed such that the unique stationary subgame per fect equilibrium outcome corresponds to the Representative Nash solution. ( C) 2000 Elsevier Science B.V. All rights reserved.