CFDP 1641

Conflict Leads to Cooperation in Nash Bargaining

Author(s): 

Publication Date: March 2008

Revision Date: June 2009

Pages: 17

Abstract: 

We consider a multilateral Nash demand game where short-sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource. We prove that group learning leads with probability one to complete cooperation and a strictly self-enforcing allocation (i.e., in the interior of the core). Highlighting group dynamics, we demonstrate that behaviors which appear destructive can themselves lead to beneficial and strictly self-enforcing cooperation.

Keywords: 

Nash bargaining, Learning, Core, Group conflict

JEL Classification Codes:  C7

Note: 

Published in Journal of Economic Behavior and Organization (March 2013), 87: 35-42 [DOI]