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Linking Strategic Interaction and Bargaining Theory. The Harsanyi - Schelling Debate on the Axiom of Symmetry

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Alessandro Innocenti ()

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Abstract

This paper analyses the early contributions of John Harsanyi and Thomas C. Schelling to bargaining theory. In his work, Harsanyi (1956) draws Nash’s solution to two-person cooperative games from the bargaining model proposed by Zeuthen (1930). Whereas Schelling (1960) proposes a multi-faceted theory of conflict that, without dismissing the assumption of rational behaviour, points out some of its paradoxical consequences. Harsanyi and Schelling’s contrasting views on the axiom of symmetry, as postulated by Nash (1950), are then presented. The analysis of this debate illustrates that, although in the early 1960s two different approaches to link strategic interaction and bargaining theory were proposed, only Harsanyi’s insights were fully developed later. Lastly, the causes of this evolution are assessed.

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 468.

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Date of creation: Nov 2005
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Handle: RePEc:usi:wpaper:468

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Keywords: bargaining; game theory; symmetry;

Find related papers by JEL classification:
B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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  1. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225 Elsevier. [Downloadable!] (restricted)
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  2. Leonard, Robert J, 1994. "Reading Cournot, Reading Nash: The Creation and Stabilisation of the Nash Equilibrium," Economic Journal, Royal Economic Society, vol. 104(424), pages 492-511, May. [Downloadable!] (restricted)
  3. John C. Harsanyi, 1957. "Bargaining in Ignorance of the Opponents' Utility Function," Cowles Foundation Discussion Papers 46, Cowles Foundation, Yale University. [Downloadable!]
  4. Robert Sugden, 2001. "The evolutionary turn in game theory," Journal of Economic Methodology, Taylor and Francis Journals, vol. 8(1), pages 113-130, March. [Downloadable!] (restricted)
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  6. Putnam, Robert D, 1988. "Diplomacy and Domestic Politics: The Logic of Two-Level Games," International Organization, MIT Press, vol. 42(3), pages 427-60, Summer.
  7. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
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  8. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April. [Downloadable!] (restricted)
  9. M. Shubik & K. Okuguchi & K. Borchardt & F. Schneider, 1990. "Book reviews," Journal of Economics, Springer, vol. 51(2), pages 207-218, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alessandro Innocenti, 2008. "How can a psychologist inform economics? The strange case of Sidney Siegel," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0808, Department of Economic Policy, Finance and Development (DEPFID), University of Siena. [Downloadable!]
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