Efficiency and Compromise: a bid-offer-counteroffer mechanism with two players

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Publication details

JournalInternational Journal of Game Theory
DateE-pub ahead of print - 17 May 2012
DatePublished (current) - 1 May 2013
Issue number2
Number of pages20
Pages (from-to)501-520
Early online date17/05/12
Original languageEnglish


bid-offer–counteroffer mechanism is proposed to solve a fundamental two-person decision choice problem with two alternatives. It yields a unique subgame perfect equilibrium outcome, and leads to an intuitive overall solution that offers a reconciliation between egalitarianism and utilitarianism. We then investigate the axiomatic foundation of the solution. Furthermore, we compare it with several conventional strategic approaches to this setting.

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