Scandinavian Working Papers in Economics
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Research Institute of Industrial Economics (IFN) Working Paper Series

No 507:
Clever Agents in Young's Evolutionary Bargaining Model

Jörgen W. Weibull () and Maria Saez-Marti ()

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; (follow links to similar papers)

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

11 pages, November 9, 1998

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This paper is published as:
Weibull, Jörgen W. and Maria Saez-Marti, (1999), 'Clever Agents in Young's Evolutionary Bargaining Model', Journal of Economic Theory, Vol. 86, June, No. 2, pages 268-279

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