Robustness to Strategic Uncertainty in the Nash Demand Game

Reprint No. 2018:2

Author(s): Ola Andersson, Cédric Argenton and Jörgen W. WeibullYear: 2018 Title: Mathematical Social Sciences Volume (No.): 91 (January) Pages: 1–5
Online article (restrictions may apply)

This paper studies the role of strategic uncertainty in the Nash demand game. A player’s uncertainty about another player’s strategy is modeled as an atomless probability distribution over that player’s strategy set. A strategy profile is robust to strategic uncertainty if it is the limit, as uncertainty vanishes, of some sequence of strategy profiles in which every player’s strategy is optimal under his or her uncertainty about the others (Andersson et al., 2014). In the context of the Nash demand game, we show that robustness to symmetric (asymmetric) strategic uncertainty singles out the (generalized) Nash bargaining solution. The least uncertain party obtains the bigger share.

Andersson, Ola, Cédric Argenton and Jörgen W. Weibull (2018), "Robustness to Strategic Uncertainty in the Nash Demand Game". Mathematical Social Sciences 91(January), 1–5.

Ola Andersson


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