Conflict Leads to Cooperation in Nash Bargaining
15 Pages Posted: 4 Mar 2008 Last revised: 26 Jun 2009
Date Written: June 26, 2009
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: Suggested Citation