Equilibrium Selection in Bargaining Models
60 Pages Posted: 19 Jun 2003
Date Written: March 21, 2003
This paper examines evolutionary equilibrium selection in bargaining models. We show that random best-response and continuous best-response learning dynamics give rise to (different) simple sufficient conditions for identifying outcomes as stochastically stable. This allows us to characterize the implications of these dynamics in simple bargaining games.
Keywords: Nash demand game, contact game, evolutionary dynamics, equilibrium selection, risk dominance, best response, stochastic stability
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