Conflict Leads to Cooperation in Nash Bargaining

15 Pages Posted: 4 Mar 2008 Last revised: 26 Jun 2009

See all articles by Kareen Rozen

Kareen Rozen

Brown University - Department of Economics

Date Written: June 26, 2009

Abstract

We consider a multilateral Nash demand game where short-sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource. We prove that group learning leads with probability one to complete cooperation and a strictly self-enforcing allocation (i.e., in the interior of the core). Highlighting group dynamics, we demonstrate that behaviors which appear destructive can themselves lead to beneficial and strictly self-enforcing cooperation.

Keywords: Nash bargaining, Learning, Core, Group conflict

JEL Classification: C7

Suggested Citation

Rozen, Kareen, Conflict Leads to Cooperation in Nash Bargaining (June 26, 2009). Cowles Foundation Discussion Paper No. 1641; Yale Economics Department Working Paper No. 39. Available at SSRN: https://ssrn.com/abstract=1102332 or http://dx.doi.org/10.2139/ssrn.1102332

Kareen Rozen (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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