EQUILIBRIUM SELECTION IN THE NASH DEMAND GAME. AN EVOLUTIONARY APPROACH

Juana Santamaria-Garcia ()
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Juana Santamaria-Garcia: Universidad de Alicante

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Equilibrium selection in the Nash demand game is investigated in a learning context with persistent randomness. I adopt a matching framework similar to Kandori, Mailath and Rob (1993) and assume that individuals belong to populations of different sizes. Despite the myopic behavior of individuals, the selected division of the surplus that will be observed most of the time coincides with the Nash bargaining solution. Depending on the matching scenario, either the symmetric or the generalized Nash bargaining solution is selected. In the latter case, the power is larger for the short-side of the market.

Keywords: bargaining; best response; convention; learning; stochastic stability. (search for similar items in EconPapers)
JEL-codes: C63 C78 D83 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004-09
New Economics Papers: this item is included in nep-evo and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2004-34

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