A Fictitious Play of the Nash Demand Game Implements the Nash Bargaining Solution

Younghwan In

No 642, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: We study a repeated Nash demand game, where bargainers follow a fictitious play procedure after their one-shot decision on demand in the initial period. In the reduced static game they play at the initial period, all the epsilon-equilibria are clustered around the division corresponding to the Nash bargaining solution when the bargainers are patient. As the bargainers make a more accurate comparison of payoffs and become more patient accordingly, the only equilibrium left is the division of the Nash bargaining solution.

Keywords: fictitious play; Nash demand game; epsilon-equilibrium; Nash bargaining solution; Nash program. (search for similar items in EconPapers)
JEL-codes: C71 C72 C78 (search for similar items in EconPapers)
Date: 2004-08-11
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:642

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