Stochastic stability in coalitional bargaining problems

Ryoji Sawa

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines a dynamic process of n-person coalitional bargaining problems. We study the stochastic evolution of social conventions by embedding a static bargaining setting in a dynamic process; Over time agents revise their coalitions and surplus distributions in the presence of stochastic payoff shocks which lead agents to make a suboptimal choice. Under a logit specification of choice probabilities, we find that the stability of a core allocation decreases in the wealth of the richest player, and that stochastically stable allocations are core allocations which minimize the wealth of the richest.

Keywords: Stochastic stability; Coalitions; Logit-response dynamics; Bargaining. (search for similar items in EconPapers)
JEL-codes: C71 C72 C73 C78 (search for similar items in EconPapers)
Date: 2014-05-11, Revised 2014-05-11
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/65142/1/MPRA_paper_65142.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58037

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