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Equilibrium Selection In The Nash Demand Game. An Evolutionary Approach

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  • Juana Santamaria-Garcia

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    (Universidad de Alicante)

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    Abstract

    Equilibrium 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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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2004-34.pdf
    File Function: Fisrt version / Primera version, 2004
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    Bibliographic Info

    Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2004-34.

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    Length: 19 pages
    Date of creation: Sep 2004
    Date of revision:
    Publication status: Published by Ivie
    Handle: RePEc:ivi:wpasad:2004-34

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    Related research

    Keywords: bargaining; best response; convention; learning; stochastic stability.;

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    References

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. BERGIN, James & LIPMAN, Bart, 1994. "Evolution with State-Dependent Mutations," CORE Discussion Papers 1994055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Murali Agastya, 1995. "An Evolutionary Bargaining Model," Game Theory and Information 9503001, EconWPA.
    4. Ellingsen, Tore, 1997. "The Evolution of Bargaining Behavior," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 581-602, May.
    5. Ken Binmore & Larry Samuelson & Petyon Young, 2003. "Equilibrium Selection in Bargaining Models," Levine's Bibliography 506439000000000466, UCLA Department of Economics.
    6. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    7. Carlsson, Hans, 1991. "A Bargaining Model Where Parties Make Errors," Econometrica, Econometric Society, vol. 59(5), pages 1487-96, September.
    8. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
    9. M. Kandori & R. Rob, 2010. "Evolution of Equilibria in the Long Run: A General Theory and Applications," Levine's Working Paper Archive 502, David K. Levine.
    10. M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
    11. Abhinay Muthoo, . "A Bargaining Model Based on the Commitment Tactic," Economics Discussion Papers 420, University of Essex, Department of Economics.
    12. Binmore, Ken & Samuelson, Larry & Young, Peyton, 2003. "Equilibrium selection in bargaining models," Games and Economic Behavior, Elsevier, vol. 45(2), pages 296-328, November.
    13. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
    14. Mailath, George J., 1993. "Perpetual randomness in evolutionary economics," Economics Letters, Elsevier, vol. 42(2-3), pages 291-299.
    15. Binmore, Ken, et al, 1993. "Focal Points and Bargaining," International Journal of Game Theory, Springer, vol. 22(4), pages 381-409.
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    Cited by:
    1. Younghwan In, 2005. "A Fictitious-Play Model of Bargaining To Implement the Nash Solution," Departmental Working Papers wp0509, National University of Singapore, Department of Economics.

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