Scandinavian Working Papers in Economics
Working Paper Series,
Research Institute of Industrial Economics
No 507: Clever Agents in Young's Evolutionary Bargaining Model
Jörgen W. Weibull () and Maria Saez-Marti ()
Additional contact information
Jörgen W. Weibull: The Research Institute of Industrial Economics, Postal: P O Box 5501, SE-114 85 Stockholm, Sweden
Maria Saez-Marti: Stockholm School of Economics, Postal: P O Box 6501, SE-113 83 Stockholm, Sweden
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 myopic 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: Evolution; Bargaining; Bounded rationality; Game theory
11 pages, November 9, 1998
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