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Bargaining with Posterior Opportunities: An Evolutionary Social Simulation

Bargaining with Posterior Opportunities: An Evolutionary Social Simulation
Bargaining with Posterior Opportunities: An Evolutionary Social Simulation
Negotiations have been extensively studied theoretically throughout the years. A well-known bilateral approach is the ultimatum game, where two agents negotiate on how to split a pie or a "dollar": the proposer makes an offer and responder can choose to accept or reject. In this paper a natural extension of the ultimatum game is presented, in which both agents can negotiate with other opponents in case of a disagreement. This way the basics of a competitive market are modeled where for instance a buyer can try several sellers before making a purchase decision. The game is investigated using an evolutionary simulation. The outcomes appear to depend largely on the information available to the agents. We find that if the agents' number of future bargaining opportunities is commonly known, the proposer has the advantage. If this information is held private, however, the responder can obtain a larger share of the pie. For the first case we also provide a game-theoretic analysis and compare the outcome with evolutionary results. Furthermore, the effects of search costs and allowing multiple issues to be negotiated simultaneously are investigated.
Springer Verlag
Gerding, E.H.
d9e92ee5-1a8c-4467-a689-8363e7743362
La Poutre, J.A.
31ffa5ed-a4a3-40d7-ac47-db7a375d95ae
Gallegati, M.
Kirman, A.P.
Marsili, M.
Gerding, E.H.
d9e92ee5-1a8c-4467-a689-8363e7743362
La Poutre, J.A.
31ffa5ed-a4a3-40d7-ac47-db7a375d95ae
Gallegati, M.
Kirman, A.P.
Marsili, M.

Gerding, E.H. and La Poutre, J.A. (2004) Bargaining with Posterior Opportunities: An Evolutionary Social Simulation. In, Gallegati, M., Kirman, A.P. and Marsili, M. (eds.) The Complex Dynamics of Economic Interaction, Springer Lecture Notes in Economics and Mathematical Systems. Springer Verlag.

Record type: Book Section

Abstract

Negotiations have been extensively studied theoretically throughout the years. A well-known bilateral approach is the ultimatum game, where two agents negotiate on how to split a pie or a "dollar": the proposer makes an offer and responder can choose to accept or reject. In this paper a natural extension of the ultimatum game is presented, in which both agents can negotiate with other opponents in case of a disagreement. This way the basics of a competitive market are modeled where for instance a buyer can try several sellers before making a purchase decision. The game is investigated using an evolutionary simulation. The outcomes appear to depend largely on the information available to the agents. We find that if the agents' number of future bargaining opportunities is commonly known, the proposer has the advantage. If this information is held private, however, the responder can obtain a larger share of the pie. For the first case we also provide a game-theoretic analysis and compare the outcome with evolutionary results. Furthermore, the effects of search costs and allowing multiple issues to be negotiated simultaneously are investigated.

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Published date: 2004
Organisations: Agents, Interactions & Complexity

Identifiers

Local EPrints ID: 265632
URI: http://eprints.soton.ac.uk/id/eprint/265632
PURE UUID: 2560829b-424c-4704-bb0e-f71a6e3f1e52
ORCID for E.H. Gerding: ORCID iD orcid.org/0000-0001-7200-552X

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Date deposited: 28 Apr 2008 15:29
Last modified: 26 Jun 2020 00:29

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Contributors

Author: E.H. Gerding ORCID iD
Author: J.A. La Poutre
Editor: M. Gallegati
Editor: A.P. Kirman
Editor: M. Marsili

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