A projected gradient dynamical system modelling the dynamics of bargaining

• Type: Article in International Scientific Journal
• Date: 2013

Authors

D. Pinheiro (Author) Other; A. A. Pinto (Author) FCUP; S. Z. Xanthopoulos (Author) Other; A. N. Yannacopoulos (Author) Other

Journal

Title: Journal of Difference Equations and Applications

Vol. 19 No. 1

Pages: 59-95

ISSN: 1023-6198

Publisher: Taylor & Francis

Indexing

ISI Web of Knowledge - 2 Citations

Scopus - 2 Citations

Scientific classification

FOS: Natural sciences > Mathematics

Other information

Authenticus ID: P-002-1PX

DOI: 10.1080/10236198.2011.623699

Abstract (EN): We propose a projected gradient dynamical system as a model for a bargaining scheme for an asset for which the two interested agents have personal valuations that do not initially coincide. The personal valuations are formed using subjective beliefs concerning the future states of the world, and the reservation prices are calculated using expected utility theory. The agents are not rigid concerning their subjective probabilities and are willing to update them under the pressure to reach finally an agreement concerning the asset. The proposed projected dynamical system, on the space of probability measures, provides a model for the evolution of the agents, beliefs during the bargaining period and is constructed so that an agreement is reached under the minimum possible deviation of both agents from their initial beliefs. The convergence results are shown using techniques from convex dynamics and Lyapunov function theory.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 37