<p>There is no such thing as the "Coasian bargaining solution". This is a simple principle according to which parties find an agreement somewhere on the Pareto frontier when they bargain, which means that the outcome of the bargaining process is socially efficient (abstracting from equity issues).</p>

<p>The Nash bargaining solution refines our predictions by specifying where the solution is likely to be located on the Pareto frontier. In some sense, it is a subset of the Coasian bargaining outcome, which can be anywhere on the Pareto frontier. In contrast to the Coase principle, it is a theorem that rests on an axiomatic characterization.</p>

CC BY-SA 3.0
2015-06-02T00:26:21.957Z
2015-06-02T00:26:21.957Z
Oliv
<p>What is the relationship or difference between Nash and Coasian bargaining solutions? <a href="http://en.wikipedia.org/wiki/Bargaining_problem#Nash_bargaining_solution" rel="nofollow">It is well-known</a> that the Nash bargaining solution satisfies certain basic axioms. Which of these does the Coasian solution satisfy? Is the Nash solution applicable when there are externalities, and are the two solutions same/comparable in any sense?</p>

CC BY-SA 3.0
2015-05-28T17:34:32.003Z
I don't think the feasibility sets are the same in the two concepts. The Nash solution deals with one good while the Coase solution assumes that both the externality and money exist. First you would need some sort of mapping between these two spaces to make the solutions comparable.
Giskard
CC BY-SA 3.0
2015-05-29T05:49:43.187Z
What do you mena by "Coasian solution"?
Michael Greinecker
CC BY-SA 3.0
2015-05-29T07:20:26.450Z
@MichaelGreinecker: Pl. refer to [this answer](http://economics.stackexchange.com/questions/363/alternatives-to-pigouvian-tax/365#365).
Bravo
CC BY-SA 3.0
2015-05-29T07:58:25.690Z
@Bravo I've read the [original paper](http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/coase.pdf) of Coase. It contains no formal model, in particular no formal model of bargaining.
Michael Greinecker
<game-theory><coasian-bargaining>
Relationship between Nash and Coasian bargaining solutions
Bravo
# Relationship between Nash and Coasian bargaining solutions

(Asked by: username_0 on 2015-05-28)

What is the relationship or difference between Nash and Coasian bargaining solutions? [It is well-known](http://en.wikipedia.org/wiki/Bargaining_problem#Nash_bargaining_solution) that the Nash bargaining solution satisfies certain basic axioms. Which of these does the Coasian solution satisfy? Is the Nash solution applicable when there are externalities, and are the two solutions same/comparable in any sense?

**Tags:** game-theory, coasian-bargaining

> **Comments:**
> **username_1**: I don't think the feasibility sets are the same in the two concepts. The Nash solution deals with one good while the Coase solution assumes that both the externality and money exist. First you would need some sort of mapping between these two spaces to make the solutions comparable.  
> **username_2**: What do you mena by "Coasian solution"?  
> **username_0**: @MichaelGreinecker: Pl. refer to [this answer](http://economics.stackexchange.com/questions/363/alternatives-to-pigouvian-tax/365#365).  
> **username_2**: @username_0 I've read the [original paper](http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/coase.pdf) of Coase. It contains no formal model, in particular no formal model of bargaining.  

---

## 1 answers

### Answer by username_3 on 2015-06-02. Score: 2

There is no such thing as the "Coasian bargaining solution". This is a simple principle according to which parties find an agreement somewhere on the Pareto frontier when they bargain, which means that the outcome of the bargaining process is socially efficient (abstracting from equity issues).

The Nash bargaining solution refines our predictions by specifying where the solution is likely to be located on the Pareto frontier. In some sense, it is a subset of the Coasian bargaining outcome, which can be anywhere on the Pareto frontier. In contrast to the Coase principle, it is a theorem that rests on an axiomatic characterization.


---

