An extension of the Nash bargaining solution to nonconvex problems

We investigate the domain of comprehensive but not necessarily convex bargaining problems. Without convexity the Nash solution is not well defined. We propose a new solution, the Nash extension, that coincides with the Nash solution when S is convex. We characterize it by weak Pareto optimality, symmetry, scale invariance, continuity, and a new axiom, ethical monotonicity. (C) 1996 Academic Press, Inc.