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Conflict Leads to Cooperation in Nash Bargaining

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  • Rozen, Kareen

    (Yale U)

Abstract

We consider a Nash demand game where N players come to the bargaining table with requests for coalition partners and a potentially generated resource. We show that group learning leads to complete cooperation and an interior core allocation with probability one. Our arguments highlight group dynamics and demonstrate how destructive group behaviors--exclusion, divide and conquer tactics, and scapegoating--can propel groups toward beneficial and self-enforcing cooperation.

Suggested Citation

  • Rozen, Kareen, 2008. "Conflict Leads to Cooperation in Nash Bargaining," Working Papers 39, Yale University, Department of Economics.
    • Handle: RePEc:ecl:yaleco:39
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    References listed on IDEAS

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    1. Perry, Motty & Reny, Philip J, 1994. "A Noncooperative View of Coalition Formation and the Core," Econometrica, Econometric Society, vol. 62(4), pages 795-817, July.
    2. Murali Agastya, 1997. "Adaptive Play in Multiplayer Bargaining Situations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 411-426.
    3. Kalyan Chatterjee & Bhaskar Dutia & Debraj Ray & Kunal Sengupta, 2013. "A Noncooperative Theory of Coalitional Bargaining," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 5, pages 97-111, World Scientific Publishing Co. Pte. Ltd..
    4. Konishi, Hideo & Ray, Debraj, 2003. "Coalition formation as a dynamic process," Journal of Economic Theory, Elsevier, vol. 110(1), pages 1-41, May.
    5. Young H. P., 1993. "An Evolutionary Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 59(1), pages 145-168, February.
    6. Agastya, Murali, 1999. "Perturbed Adaptive Dynamics in Coalition Form Games," Journal of Economic Theory, Elsevier, vol. 89(2), pages 207-233, December.
    7. Arnold, Tone & Schwalbe, Ulrich, 2002. "Dynamic coalition formation and the core," Journal of Economic Behavior & Organization, Elsevier, vol. 49(3), pages 363-380, November.
    8. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
    9. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    Cited by:

    1. Heinrich H. Nax & Bary S.R. Pradelski, 2012. "Evolutionary dynamics and equitable core selection in assignment games," Economics Series Working Papers 607, University of Oxford, Department of Economics.
    2. Heinrich H. Nax & Bary S. R. Pradelski & H. Peyton Young, 2013. "The Evolution of Core Stability in Decentralized Matching Markets," Working Papers 2013.50, Fondazione Eni Enrico Mattei.
    3. Bary S.R. Pradelski, 2014. "Evolutionary Dynamics and Fast Convergence in the Assignment Game," Economics Series Working Papers 700, University of Oxford, Department of Economics.

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    JEL classification:

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

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