Equilibrium Selection In The Nash Demand Game. An Evolutionary Approach
AbstractEquilibrium selection in the Nash demand game is investigated in a learning context with persistent randomness. I adopt a matching framework similar to Kandori, Mailath and Rob (1993) and assume that individuals belong to populations of different sizes. Despite the myopic behavior of individuals, the selected division of the surplus that will be observed most of the time coincides with the Nash bargaining solution. Depending on the matching scenario, either the symmetric or the generalized Nash bargaining solution is selected. In the latter case, the power is larger for the short-side of the market.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2004-34.
Length: 19 pages
Date of creation: Sep 2004
Date of revision:
Publication status: Published by Ivie
bargaining; best response; convention; learning; stochastic stability.;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-19 (All new papers)
- NEP-EVO-2006-02-19 (Evolutionary Economics)
- NEP-GTH-2006-02-19 (Game Theory)
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