A Demand Adjustment Process

International Journal of Game Theory, Vol. 26, No. 4 (1997)

Posted: 2 Apr 1998

See all articles by Elaine Bennett

Elaine Bennett

Virginia Polytechnic Institute & State University - Department of Economics

Michael Maschler

Hebrew University of Jerusalem

William R. Zame

University of California, Los Angeles (UCLA) - Department of Economics

Abstract

The aspiration approach to cooperative games, which has been studied by a number of authors, including Cross, Turbay, Albers, Selten and Bennett, presumes that players in a game bargain over their reservation prices, or aspirations. A number of aspiration-based solution concepts have been put forth, and aspiration solutions have been connected to non-cooperative bargaining models. Missing in this approach has been theory of how aspirations themselves arise. The present paper is an attempt to fill this gap. It describes a very general demand adjustment process, using the framework of set-valued dynamical systems developed by Maschler and Peleg. This demand adjustment process always converges; sufficient conditions are given in order that it converge to an aspiration, and that it converge in a finite number of steps.

Note: Elaine Bennett, deceased, was affiliated with Virginia Polytechnic Institite & State University at the time this abstract was written.

JEL Classification: C70

Suggested Citation

Bennett (deceased), Elaine and Maschler, Michael and Zame, William R., A Demand Adjustment Process. International Journal of Game Theory, Vol. 26, No. 4 (1997), Available at SSRN: https://ssrn.com/abstract=73048

Elaine Bennett (deceased)

Virginia Polytechnic Institute & State University - Department of Economics

N/A

Michael Maschler (Contact Author)

Hebrew University of Jerusalem ( email )

Einstein School of Mathematics
Jerusalem 91905
Israel
+972 2 5660869 (Phone)
+972 2 5618019 (Fax)

William R. Zame

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States
310-206-9463 (Phone)

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