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Conflict leads to cooperation in demand bargaining

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  • Rozen, Kareen

Abstract

We consider a multilateral Nash demand game in which short-sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource. We prove that the resulting process converges with probability one to a state in which all players agree on a strictly self-enforcing division of resources (i.e., a strict core allocation). Highlighting group dynamics, we show how the myopic actions of players may lead to the break up of groups in the short run, but can ultimately bring about a situation from which a strictly self-enforcing allocation can be reached.

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  • Rozen, Kareen, 2013. "Conflict leads to cooperation in demand bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 35-42.
    • Handle: RePEc:eee:jeborg:v:87:y:2013:i:c:p:35-42
    DOI: 10.1016/j.jebo.2012.12.005
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    Cited by:

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    2. Heinrich Nax & Bary Pradelski, 2015. "Evolutionary dynamics and equitable core selection in assignment games," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(4), pages 903-932, November.
    3. Nax, Heinrich H. & Pradelski, Bary S. R., 2015. "Evolutionary dynamics and equitable core selection in assignment games," LSE Research Online Documents on Economics 65428, London School of Economics and Political Science, LSE Library.
    4. Sawa, Ryoji, 2019. "Stochastic stability under logit choice in coalitional bargaining problems," Games and Economic Behavior, Elsevier, vol. 113(C), pages 633-650.
    5. Maria Montero & Alex Possajennikov, 2022. ""Greedy" Demand Adjustment in Cooperative Games," Discussion Papers 2022-05, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    6. Sawa, Ryoji, 2021. "A prospect theory Nash bargaining solution and its stochastic stability," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 692-711.
    7. Khan, Abhimanyu, 2021. "Evolutionary stability of behavioural rules in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 399-414.
    8. Khan, Abhimanyu, 2022. "Expected utility versus cumulative prospect theory in an evolutionary model of bargaining," Journal of Economic Dynamics and Control, Elsevier, vol. 137(C).
    9. Jonathan Newton, 2018. "Evolutionary Game Theory: A Renaissance," Games, MDPI, vol. 9(2), pages 1-67, May.

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    More about this item

    Keywords

    Demand bargaining; Strictly self-enforcing allocations; Strict core; Best response dynamics;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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