Scandinavian Working Papers in Economics

Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

No 03-9: On Efficiency, Tie Breaking Rules and Role Assignment Procedures in Evolutionary Bargaining

Anders Poulsen ()
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Anders Poulsen: Department of Economics, Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark

Abstract: We study a simple evolutionary bargaining game and show that the efficiency of bargaining behavior can depend crucially on the tie breaking rule players use. In fact, in a certain limit all the surplus is wasted. Inefficiency arises for any role assignment procedure, as long as there is some probability that two players are assigned to the same role. We also give results on the relationship between inefficiency and spitefulness.

Keywords: Game theory Bargaining; Two-stage Nash Demand Game; Efficiency; Evolutionary stability; Tie-breaking role assignment; Truly asymmetric contest

JEL-codes: C70

9 pages, November 1, 2003

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