Efficient solutions to bargaining problems with uncertain disagreement points

We consider a cooperative model of bargaining where the location of the disagreement point may be uncertain. Based on the maximin criterion, we formulate an ex ante efficiency condition and characterize the class of bargaining solutions satisfying this axiom. These solutions are generalizations of the monotone path solutions. Adding individual rationality yields a subclass of these solutions. By employing maximin efficiency and an invariance property that implies individual rationality, a new axiomatization of the monotone path solutions is obtained. Furthermore, we show that an efficiency axiom employing the maximax criterion leads to an impossibility result. Journal of Economic Literature Classification No.: C78. ∗ Financial support from the Nederlandse Organisatie voor Wetenschappelijk Onderzoek (NWO) under grant no. B46-363 and from the University of Nottingham is gratefully acknowledged.