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

No 281:
Clever agents in Young's evolutionary bargaining model

Maria Saez-Marti and Jörgen W. Weibull ()

Abstract: In the models of Young (1993a, b), boundedly rational individuals are recurrently matched to play a game, and they play myopic best replies to the recent history of play. It could therefore be an advantage to instead play a myiopic best reply to the myopic best reply, something boundedly rational players might conceivably also do. We investigate this possibility in the context of Young's (1993b) bargaining model. It turns out that "cleverness" in this respect indeed does have an advantage in some cases. However, if all individuals are equally informed about past play, in a statistical sense, then the Nash bargaining solution remains the unique long-run outcome when the mutation rate goes to zero.

Keywords: Bargaining; evolution; game theory; (follow links to similar papers)

JEL-Codes: C70; C78; (follow links to similar papers)

11 pages, November 10, 1998

Published in Journal of Economic Theory, 1999, Vol 86, No 2.

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This paper is published as:
Saez-Marti, Maria and Jörgen W. Weibull, (1999), 'Clever agents in Young's evolutionary bargaining model', Journal of Economic Theory, Vol. 86, pages 268-279

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