We analyse the two‐dimensional Nash bargaining solution (NBS) by deploying the standard labour market negotiations model of McDonald and Solow. We show that the two‐dimensional bargaining problem can be decomposed into two one‐dimensional problems, such that the two solutions together...

We study the consequences of modeling asymmetric bargaining power in two-person bargaining problems. Comparing application of an asymmetric version of a bargaining solution to an upfront modification of the disagreement point, the resulting distortion crucially depends on the bargaining solution...