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Evolutionary Stability in Bargaining with an Asymmetric Breakdown Point

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  • Torstensson, Pär

    (Department of Economics, Lund University)

Abstract

We study an asymmetric two-player bargaining game with risk of breakdown and no discounting. We characterize the modified evolutionarily stable strategies (MESS) by modelling strategies as automata. Payoff and complexity considerations are taken in the automata-selection process. We show that a MESS exists in the bargaining game and that agreement is reached immediately. It turns out that in the search for evolutionary foundation, we find support for all partitions that assigns the positive breakdown utility x or more to the player with the higher breakdown utility, given that it exceeds half the surplus.

Suggested Citation

  • Torstensson, Pär, 2005. "Evolutionary Stability in Bargaining with an Asymmetric Breakdown Point," Working Papers 2005:38, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2005_038
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP05_38.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Modified evolutionary stable strategies; bargaining; automata; asymmetric breakdown point.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative 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

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