학술저널
Complexity and Markov Behavior in Bargaining with Investments
- 한국계량경제학회
- JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS
- Vol.25 No.1
-
2014.0313 - 26 (13 pages)
- 7
This paper invokes complexity considerations to justify Markov behavior in a non-stationary bargaining model of Che and S´akovics (2004) in which the surplus depends on the players' relationship-specific investments. Using the notion of state complexity and the machine game analysis developed by Lee and Sabourian (2007), it is shown that if the players have lexicographic complexityaverse preferences then every Nash equilibrium of the game must be Markov.
Abstract
1. INTRODUCTION
2. THE MODEL
3. MACHINES, COMPLEXITY AND EQUILIBRIUM
4. NEM RESULTS
5. CONCLUDING DISCUSSION
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