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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 61:
The Evolution of Bargaining Behavior

Tore Ellingsen ()

Abstract: The paper examines the evolutionary foundations of bilateral bargaining behavior, emphasizing the trade-off between commitment and flexibility. When the pie's size is certain, evolution favors the "fair" strategy; accept any share greater than or equal to one half, reject any smaller share. The unique outcome is hence an equal split. In noisy environments, more flexible behavior tends to appear in equilibrium. Since flexibility attracts greediness, there is then a positive probability of conflict.

Keywords: Bargaining; evolution; commitment; Coase Theorem; (follow links to similar papers)

JEL-Codes: C78; (follow links to similar papers)

16 pages, July 1995

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This paper is published as:
Ellingsen, Tore, (1997), 'The Evolution of Bargaining Behavior', Quarterly Journal of Economics, Vol. 112, pages 581-602



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