Tore Ellingsen: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Abstract: The paper examines the evolutionary foundations of bilateral bargaining behavior, emphasizing the trade-off between commitment and flexibility. When the pie's size is certain, evolution favors the "fair" strategy; accept any share greater than or equal to one half, reject any smaller share. The unique outcome is hence an equal split. In noisy environments, more flexible behavior tends to appear in equilibrium. Since flexibility attracts greediness, there is then a positive probability of conflict.
16 pages, July 1995
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