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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.

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Bibliographic Info

Paper provided by Yale University, Department of Economics in its series Working Papers with number 39.

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Date of creation: Mar 2008
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Handle: RePEc:ecl:yaleco:39

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  1. Murali Agastia, . "Adaptive Play in Multiplayer Bargaining Situations," ELSE working papers 007, ESRC Centre on Economics Learning and Social Evolution.
  2. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
  3. Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
  4. Hideo Konishi & Debraj Ray, 2000. "Coalition Formation as a Dynamic Process," Boston College Working Papers in Economics 478, Boston College Department of Economics, revised 15 Apr 2002.
  5. Chatterjee, Kalyan & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 463-77, April.
  6. 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.
  7. Agastya, Murali, 1999. "Perturbed Adaptive Dynamics in Coalition Form Games," Journal of Economic Theory, Elsevier, vol. 89(2), pages 207-233, December.
  8. Arnold, Tone & Schwalbe, Ulrich, 2002. "Dynamic coalition formation and the core," Journal of Economic Behavior & Organization, Elsevier, vol. 49(3), pages 363-380, November.
  9. Young H. P., 1993. "An Evolutionary Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 59(1), pages 145-168, February.
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Cited by:
  1. 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.
  2. H Peyton Young & Heinrich H. Nax & Bary S.R. Pradelski, 2012. "Decentralized dynamics and equitable core selection in assignment games," Economics Series Working Papers 607, University of Oxford, Department of Economics.

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