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.
Nash bargaining, Learning, Core, Group conflict
JEL Classification Codes: C7
Published in Journal of Economic Behavior and Organization (March 2013), 87: 35-42 [DOI]