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Equity dynamics in bargaining without information exchange

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  • Nax, Heinrich H.

Abstract

In this paper, completely uncoupled dynamics for n-player bargaining are proposed that mirror key behavioral elements of early bargaining and aspiration adjustment models (Zeuthen, 1930; Sauermann and Selten, 118:577–597 1962). Individual adjustment dynamics are based on directional learning adjustments, solely driven by histories of own realized payoffs. Bargaining this way, all possible splits have positive probability in the stationary distribution of the process, but players will split the pie almost equally most of the time. The expected waiting time for almost equal splits to be played is quadratic.

Suggested Citation

  • Nax, Heinrich H., 2015. "Equity dynamics in bargaining without information exchange," LSE Research Online Documents on Economics 65426, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:65426
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    File URL: http://eprints.lse.ac.uk/65426/
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    References listed on IDEAS

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    Cited by:

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    3. Colasante, Annarita, 2017. "Selection of the distributional rule as an alternative tool to foster cooperation in a Public Good Game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 468(C), pages 482-492.

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    More about this item

    Keywords

    bargaining; cooperative game theory; equity; evolutionary game theory; (completely uncoupled) learning;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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