Game-theoretic models of bargaining are typically based on the assumption that players have perfect rationality and that they always play an equilibrium strategy. In contrast, research in experimental economics shows that in bargaining between human subjects, participants do not always play the equilibrium strategy. Such agents are said to be boundedly rational. In playing a game against a boun...

This paper investigates whether ’tough’ bargaining behavior, which gives rise to inefficiency, can be evolutionary stable. We show that in a two-stage Nash Demand Game tough behavior survives. Indeed, almost all the surplus may be wasted. These results differ drastically from those of Ellingsen’s model (Ellingsen (1997)), where bargaining is efficient. We also study the Ultimatum Game. Here evo...

We provide a new interpretation of the Nash bargaining solution, using fictitious play. Based on the finding that the Nash demand game has the fictitious play property and that almost every fictitious play process and its associated belief path converge to a pure-strategy Nash equilibrium in the Nash demand game (In, 2014), we present two initial demand games which exactly and approximately imp...

Agents located from downstream to upstream along an estuary and exposed to a flooding risk have to invest in facilities like a seawall (or dike). As the benefits of that local public good increase along the estuary, upstream agents have to bargain for monetary compensation with the most downstream agent in exchange for more protection effort. The paper analyses different bargaining protocols an...

This paper presents a computational model of negotiation based on Nebel’s syntax-based belief revision. The model guarantees a unique bargaining solution for each bargaining game without using lotteries. Its game-theoretic properties are discussed against the existence and uniqueness of Nash equilibrium and subgame perfect equilibrium. We also study essential computational properties in relatio...

The paper examines the theoretical foundations of the hold–up problem. At a first stage, one agent decides on the level of a relationship– specific investment. There is no contract, so at a second stage the agent must bargain with a trading partner over the surplus that the investment has generated. We show that the conventional underinvestment result hinges crucially both on the assumed bargai...

In this paper, we investigate a noncooperative sequential bargaining game for allowing a group of agents agents to partition themselves into non-overlapping coalitions. We focus on the issue of how a player’s position on the bargaining agenda affects his power. We also analyse the relationship between the distribution of the power of individual players, the level of democracy, and the welfare e...

I study a bilateral bargaining game in which the size of the surplus follows a stochastic process and in which players might be optimistic about their bargaining power. Following Yildiz (2003), I model optimism by assuming that players have different beliefs about the recognition process. I show that the unique subgame perfect equilibrium of this game might involve inefficient delays. I also sh...

We present a new technique for analyzing the rate of convergence of local dynamics in bargaining networks. The technique reduces balancing in a bargaining network to optimal play in a randomturn game. We analyze this game using techniques from martingale and Markov chain theory. We obtain a tight polynomial bound on the rate of convergence for a nontrivial class of unweighted graphs (the previo...

I study a noncooperative multilateral bargaining game of coalition formation, based on underlying TU games in partition form, in which coalitions are allowed to renegotiate agreements. Special attention is devoted to the strategic considerations induced by the possibility of renegotiation and its consequences for the efficiency of bargaining. I deÞne a class of games, relative positive and rela...