| Article ID: | iaor20133012 |
| Volume: | 42 |
| Issue: | 2 |
| Start Page Number: | 501 |
| End Page Number: | 520 |
| Publication Date: | May 2013 |
| Journal: | International Journal of Game Theory |
| Authors: | Ju Yuan |
| Keywords: | bidding |
A bid‐offer–counteroffer mechanism is proposed to solve a fundamental two‐person decision choice problem with two alternatives. It yields a unique subgame perfect equilibrium outcome, and leads to an intuitive overall solution that offers a reconciliation between egalitarianism and utilitarianism. We then investigate the axiomatic foundation of the solution. Furthermore, we compare it with several conventional strategic approaches to this setting.