Evolutionary game analysis on bargaining strategies

ZHAN Wen-jie, ZOU Yi

Systems Engineering - Theory & Practice ›› 2014, Vol. 34 ›› Issue (5) : 1181-1187.

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Systems Engineering - Theory & Practice ›› 2014, Vol. 34 ›› Issue (5) : 1181-1187. DOI: 10.12011/1000-6788(2014)5-1181

Evolutionary game analysis on bargaining strategies

  • ZHAN Wen-jie, ZOU Yi
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Abstract

By constructing a model of replicator dynamics with two disjoint populations, this paper studies the evolution of strategies in a many-to-many bargaining based on the assumption that traders are boundedly rational. It is proved that only strict Nash equilibriums can be the evolutionarily stable strategy (ESS) in the bargaining. Simulation results show that the ESS converges to the symmetric Nash equilibrium with the maximal probability if fractions of buyers' and sellers' strategies are randomly initialized. Moreover, the Nash equilibrium, which generates the maximal product of initial expected return of two sides, accurately predicts the ESS in most cases. Finally, the evolutionary process of ESS is not necessary to be monotonous. The result helps to understand the general pattern in which a many-to-many bargaining comes to terms, and serves as reference for designing multilateral negotiation support system.

Key words

bargaining / evolutionary game theory / Nash equilibrium / evolutionarily stable strategy

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ZHAN Wen-jie , ZOU Yi. Evolutionary game analysis on bargaining strategies. Systems Engineering - Theory & Practice, 2014, 34(5): 1181-1187 https://doi.org/10.12011/1000-6788(2014)5-1181

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