1 GlobID -Globalization and Industry Dynamics, Aarhus School of Business, Aarhus BSS, Aarhus University2 Industrial Economics, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics, Aarhus School of Business, Aarhus BSS, Aarhus University
This paper investigates whether 'tough' bargaining behavior, which gives rise to inefficiency, can be evolutionary stable. We show that in a two-stage Nash Demand Game such behavior survives. We also study the Ultimatum Game. Here evolutionary selection wipes out all tough behavior, as long as the Proposer does not directly observe the Responder's commitment to rejecting low offers.
International Game Theory Review, 2003, Vol 5, Issue 1, p. 63-73
Game theory; evolution; bargaining; efficiency; toughness