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Conflict Leads to Cooperation in Nash Bargaining

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  • Kareen Rozen

Abstract

We consider a multilateral Nash demand game where short-sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource. We prove that group learning leads with probability one to complete cooperation and a strictly self-enforcing allocation (i.e., in the interior of the core). Highlighting group dynamics, we demonstrate that behaviors which appear destructive can themselves lead to beneficial and strictly self-enforcing cooperation.
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Suggested Citation

  • Kareen Rozen, 2008. "Conflict Leads to Cooperation in Nash Bargaining," Levine's Working Paper Archive 122247000000002086, David K. Levine.
    • Handle: RePEc:cla:levarc:122247000000002086
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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.
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    3. 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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    6. 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..
    7. 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.
    8. 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.
    9. Arnold, Tone & Schwalbe, Ulrich, 2002. "Dynamic coalition formation and the core," Journal of Economic Behavior & Organization, Elsevier, vol. 49(3), pages 363-380, November.
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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. 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.
    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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