 Bargaining problems are a form of two person cooperative game, characterised by (i) the status quo point, that is, what bargainers would receive in the absence of an agreement; (ii) the feasible set of Pareto improving points, which is shaped by the transactors utility functions, and (iii) a solution concept, which selects a (usually unique and Pareto optimal) point in this set as the rational distribution. Nash’s solution is the unique point in the feasible set that maximises the product of the agents utility gain compared to the status quo point for a particular distribution. For example, suppose \(A\) wants to buy \(B\)’s phone and the two are bargaining over the price. \(B\)’s reservation price might be $100—she won’t sell her phone for less. \(A\)’s reservation price might be $200—he won’t pay any more than this for the phone. In this case, \(A\) and \(B\) are bargaining over a $100 surplus. For simplicity, let’s also make the (usually unrealistic) assumption that the transactors utility gains are linear with respect to money. In this case, \(A\) gains 100 utils if he gets the phone for $100 dollars and \(B\) gets 100 utils if she sells the phone for $200. The Nash solution is the price at which the value of multiplying \(A\)’s utils by \(B\)’s utils is maximised. As we can see in the following simplified table, in this case the Nash solution happens to also involve an equal split of the utility: when both gain 50 utils (which by our simplifying assumption is also $50) the product of the agents utilities is maximised.