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Clever agents in Young's evolutionary bargaining model

Author

Listed:
  • Saez-Marti, Maria

    (Dept. of Economics, Stockholm School of Economics)

  • Weibull, Jörgen W.

    () (Dept. of Economics, Stockholm School of Economics)

Abstract

In the models of Young (1993a, b), boundedly rational individuals are recurrently matched to play a game, and they play myopic best replies to the recent history of play. It could therefore be an advantage to instead play a myiopic best reply to the myopic best reply, something boundedly rational players might conceivably also do. We investigate this possibility in the context of Young's (1993b) bargaining model. It turns out that "cleverness" in this respect indeed does have an advantage in some cases. However, if all individuals are equally informed about past play, in a statistical sense, then the Nash bargaining solution remains the unique long-run outcome when the mutation rate goes to zero.

Suggested Citation

  • Saez-Marti, Maria & Weibull, Jörgen W., 1998. "Clever agents in Young's evolutionary bargaining model," SSE/EFI Working Paper Series in Economics and Finance 281, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0281
    Note: Published in Journal of Economic Theory, 1999, Vol 86, No 2.
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    References listed on IDEAS

    as
    1. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    2. Young H. P., 1993. "An Evolutionary Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 59(1), pages 145-168, February.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    4. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    5. Tore Ellingsen, 1997. "The Evolution of Bargaining Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 581-602.
    6. Stahl Dale O., 1993. "Evolution of Smartn Players," Games and Economic Behavior, Elsevier, vol. 5(4), pages 604-617, October.
    7. Hurkens Sjaak, 1995. "Learning by Forgetful Players," Games and Economic Behavior, Elsevier, vol. 11(2), pages 304-329, November.
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    Citations

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    Cited by:

    1. Matros, Alexander, 2003. "Clever agents in adaptive learning," Journal of Economic Theory, Elsevier, vol. 111(1), pages 110-124, July.
    2. Blume, Andreas & Arnold, Tone, 2004. "Learning to communicate in cheap-talk games," Games and Economic Behavior, Elsevier, vol. 46(2), pages 240-259, February.
    3. Abhimanyu Khan & Ronald Peeters, 2014. "Cognitive hierarchies in adaptive play," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(4), pages 903-924, November.
    4. Josephson, Jens, 2009. "Stochastic adaptation in finite games played by heterogeneous populations," Journal of Economic Dynamics and Control, Elsevier, vol. 33(8), pages 1543-1554, August.
    5. Matros, Alexander, 2012. "Altruistic versus egoistic behavior in a Public Good game," Journal of Economic Dynamics and Control, Elsevier, vol. 36(4), pages 642-656.
    6. 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.
    7. Rozen, Kareen, 2013. "Conflict leads to cooperation in demand bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 35-42.
    8. Herbert Dawid & Joern Dermietzel, 2006. "How Robust is the Equal Split Norm? Responsive Strategies, Selection Mechanisms and the Need for Economic Interpretation of Simulation Parameters," Computational Economics, Springer;Society for Computational Economics, vol. 28(4), pages 371-397, November.
    9. Ellingsen, Tore & Robles, Jack, 2002. "Does Evolution Solve the Hold-Up Problem?," Games and Economic Behavior, Elsevier, vol. 39(1), pages 28-53, April.
    10. Wallace, Chris & Young, H. Peyton, 2015. "Stochastic Evolutionary Game Dynamics," Handbook of Game Theory with Economic Applications, Elsevier.
    11. William H. Sandholm, 2001. "Almost global convergence to p-dominant equilibrium," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(1), pages 107-116.
    12. Kevin Hasker, 2014. "The Emergent Seed: A Representation Theorem for Models of Stochastic Evolution and two formulas for Waiting Time," Levine's Working Paper Archive 786969000000000954, David K. Levine.
    13. Francesco Squintani, 1999. "Moral Hazard," Discussion Papers 1269, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    14. repec:pit:wpaper:309 is not listed on IDEAS
    15. Heinrich Nax, 2015. "Equity dynamics in bargaining without information exchange," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 1011-1026, November.

    More about this item

    Keywords

    Bargaining; evolution; game theory;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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