Working Papers, Department of Economics, Lund University
Evolutionary Stability in Bargaining with an Asymmetric Breakdown Point
Abstract: We study an asymmetric two-player bargaining game with
risk of breakdown and no discounting. We characterize the modified
evolutionarily stable strategies (MESS) by modelling strategies as
automata. Payoff and complexity considerations are taken in the
automata-selection process. We show that a MESS exists in the bargaining
game and that agreement is reached immediately. It turns out that in the
search for evolutionary foundation, we find support for all partitions that
assigns the positive breakdown utility x or more to the player with the
higher breakdown utility, given that it exceeds half the surplus.
Keywords: Modified evolutionary stable strategies; bargaining; automata; asymmetric breakdown point.; (follow links to similar papers)
JEL-Codes: C72; C73; C78; (follow links to similar papers)
34 pages, June 15, 2005
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