Marco Mariotti

Stochastic Choice and Consideration Sets

We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximizes a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.

DOES DIVORCE LAW MATTER

In this paper we derive an explicit model of negotiations between spouses when utility is (partially) transferable only in case of separation. We show that inefficient separation may occur in equilibrium even under consensual divorce law. This provides theoretical support for the view that changes in social norms rather than in legislation may be responsible for increasing divorce rates.

A Million Answers to Twenty Questions: Choosing by Checklist

Several decision models in marketing science and psychology assume that a consumer chooses by proceeding sequentially through a checklist of desirable properties. These models are contrasted to the utility maximization model of rationality in economics. We show on the contrary that the two approaches are nearly equivalent. Since the number of preference discriminations that an agent can make increases exponentially in the number of properties used, checklists provide a rapid procedural basis for utility maximization.

Fair Bargains: Distributive Justice and Nash Bargaining Theory

The Suppes-Sen dominance relation is a weak and widely accepted criterion of distributive justice. I propose its application to Nash bargaining theory. The Nash Bargaining Solution (NBS) is characterised by replacing the controversial Independence of Irrelevant Alternatives axiom with an axiom embodying the Suppes-Sen principle. The characterisation is more robust than the standard one with respect to variations in the domain of bargaining problems. It is also shown that a subset of Nashs axioms imply the Suppes-Sen relation.

A bargaining model of voluntary environmental agreements

Abstract We present an explicit model of firm-regulator negotiations in a market with several firms. We describe how the regulatory surplus is distributed between firms and regulator, and analyse the impact of various parameters on the resulting level of environmental regulation. Our main result is that a ‘toughest firm principle’ holds: the outcome of negotiations is essentially determined by the firm with the most aggressive attitude towards environmental control.

Perfect Equilibria in a Model of Bargaining with Arbitration

Abstract We consider an alternating offer bargaining model in which the players may agree to call in an arbitrator in case of disagreement. The main message of our study is that the mere presence of an arbitrator—who can only become active with the consent of both parties—in the background of negotiations may entirely drive their outcome. We compare our results with those obtained in models with outside options. Journal of Economic Literature classification Number: C78.

Nash Bargaining Theory, Nonconvex Problems and Social Welfare Orderings

In this paper we deal with the extension of Nash bargaining theory to nonconvex problems. By focussing on the Social Welfare Ordering associated with a bargaining solution, we characterize the symmetric Nash Bargaining Solution (NBS). Moreover, we obtain a unified method of proof of recent characterization results for the asymmetric single-valued NBS and the symmetric multivalued NBS, as well as their extensions to different domains.

‘Non-interference’ implies equality

We propose a new principle of ‘non-interference’ applied to social welfare orderings. The principle, together with two other standard requirements, implies a strong egalitarian conclusion: the ordering must lexicographically maximize the welfare of the worst off.

Is Bayesian Rationality Compatible with Strategic Rationality

In Bayesian game theory, each player obeys the Savage axioms and there is common knowledge of this. The author shows that two of the less controversial axioms (ordering and dominance) are incompatible with some elementary game theoretic principles. He furthermore argues that his impossibility result is the consequence of a more fundamental conflict between the states of nature/acts framework of decision theory and the principles of strategic rationality. Copyright 1995 by Royal Economic Society.

Maximal symmetry and the Nash solution

Abstract. The Nash Bargaining Solution is characterised by using the new axiom of Maximal Symmetry in place of Nashs Independence of Irrelevant Alternatives and Symmetry. This axiom expresses the idea that a fair arbitrator should treat symmetric alternatives in the same way, subject to the feasibility constraint. An advantage of the proposed characterisations is that they are valid on a wide set of domains, in particular domains including, or consisting of, non-convex problems.