Fair bargains: distributive justice and Nash Bargaining Theory

The Suppes-Sen dominance relation is a weak and widely accepted criterion of distributive justice. We propose its application to Nash bargaining theory. The Nash Bargaining Solution (NBS) is characterised by replacing the contriversial Independence of Irrelevant Alternatives axiom with an axiom embodying the Suppes-Sen Principle. More precisely, the Suppes-Sen relation is shown to be equivalent to the (relation implied by the) NBS in the presence of Scale Covariance. The characterisation is far more robust than the standard one with respect to variations in the domain of bargaining problems. It is shown that a subset of Nash's axioms imply the Suppes-Sen relation.