IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Evolution of Division Rules

  • Birendra K. Rai

    ()

Several division rules have been proposed in the literature regarding how an arbiter should divide a bankrupt estate. Different rules satisfy different sets of axioms, but all rules satisfy claims boundedness which requires that no contributor be given more than her initial contribution. This paper takes two non-cooperative bargaining games - the contracting game (Young, 1998a), and the Nash demand game, and adds the axiom of claims boundedness to the rules of these games. Outcomes prescribed by all the division rules are strict Nash equilibria in the one-shot version of both these augmented games. We show that the division suggested by the truncated claims proportional rule is the unique long run outcome if we embed the augmented contracting game in Young’s (1993b) evolutionary bargaining model. With the augmented Nash demand game as the underlying bargaining game, the long run outcome is the division prescribed by the constrained equal awards rule.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2006-27.pdf
Download Restriction: no

Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2006-27.

as
in new window

Length: 21 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:esi:discus:2006-27
Contact details of provider: Postal: Kahlaische Strasse 10, D-07745 Jena
Phone: +49-3641-68 65
Fax: +49-3641-68 69 90
Web page: http://www.econ.mpg.de/

More information through EDIRC

Order Information: Web: http://www.econ.mpg.de/english/research/ESI/discuss.php Email:


References listed on IDEAS
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.:

as in new window
  1. Michihiro, Kandori & Rob, Rafael, 1998. "Bandwagon Effects and Long Run Technology Choice," Games and Economic Behavior, Elsevier, vol. 22(1), pages 30-60, January.
  2. Young H. P., 1993. "An Evolutionary Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 59(1), pages 145-168, February.
  3. Ellingsen, Tore & Robles, Jack, 2000. "Does Evolution Solve the Hold-up Problem?," SSE/EFI Working Paper Series in Economics and Finance 358, Stockholm School of Economics.
  4. J Bergin & B L Lipman, 1997. "Evolution with state-dependent Mutations," Levine's Working Paper Archive 771, David K. Levine.
  5. Binmore, Ken & Samuelson, Larry & Young, Peyton, 2003. "Equilibrium selection in bargaining models," Games and Economic Behavior, Elsevier, vol. 45(2), pages 296-328, November.
  6. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-18, May.
  7. Herve Moulin, 2004. "Fair Division and Collective Welfare," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633116, June.
  8. Troger, Thomas, 2002. "Why Sunk Costs Matter for Bargaining Outcomes: An Evolutionary Approach," Journal of Economic Theory, Elsevier, vol. 102(2), pages 375-402, February.
  9. Young, H Peyton, 1998. "Conventional Contracts," Review of Economic Studies, Wiley Blackwell, vol. 65(4), pages 773-92, October.
  10. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
  11. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:esi:discus:2006-27. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karin Richter)

The email address of this maintainer does not seem to be valid anymore. Please ask Karin Richter to update the entry or send us the correct address

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.