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Territorial Bargaining

Author

Listed:
  • H. Lorne Carmichael

    (Queen's University)

  • W. Bentley MacLeod

    (Boston College)

Abstract

We examine an evolutionary model of preferences in a society where resources are finite. Agents who develop better strategies for bargaining and trading will grow to dominate the population. We show that successful agents will have preferences that exhibit the "endowment effect". The social institution of private property emerges spontaneously. Agents decisions will be subject to "framing" effect, and we are able to make some predictions as to the frames that will be salient in given situations. The model makes a clear distinction between individual welfare and revealed preferences. Nonetheless, it may still be possible to recover information about individual welfare from behavioral data.

Suggested Citation

  • H. Lorne Carmichael & W. Bentley MacLeod, 1997. "Territorial Bargaining," Boston College Working Papers in Economics 343., Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:343
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    References listed on IDEAS

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    Cited by:

    1. W. Bentley MacLeod, 1996. "Decision, Contract, and Emotion: Some Economics for a Complex and Confusing World," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 788-810, November.

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    More about this item

    Keywords

    bargaining; fairness; property rights; endowment effect; framing;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General

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