(DP 1983-11) Arbitration and Group Decision Under Uncertainty

Abstract

Assuming that the parties to a conflict have lexicographic preference, an arbitration model is formulated whose solution is fair in the sense that if it is not arbitrary. The solution, which is simply an extension of the idea of Patero optimality to the multidimensional utility case, satisfies four conditions analogous to those of Nash for a beginning problem, and it is the only solution that does so. It also applies to the group decision problem under uncertainly, permitting different individual preference orderings and different subjective probability judgements.