A projected gradient dynamical system modelling the dynamics of bargaining

DOI10.1080/10236198.2011.623699MaRDI QIDQ4908671zbMATH OpenOpenAlexFDO

Authors Alberto Pinto, S. Z. Xanthopoulos, D. Pinheiro, Athanasios Yannacopoulos

Publication date 6 March 2013

Published in Journal of Difference Equations and Applications (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1105.1767, http://repositorio.inesctec.pt/handle/123456789/6118

zbMATH Keywords

penalized optimization problembargaining dynamicsdiscrete-time projected dynamical systems

Mathematics Subject Classification ID

Nonlinear programming (90C30) Auctions, bargaining, bidding and selling, and other market models (91B26) Sensitivity, stability, parametric optimization (90C31) Dynamical systems in optimization and economics (37N40) Microeconomic theory (price theory and economic markets) (91B24)

Abstract: 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 which 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 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.

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Cites work

• scientific article; zbMATH DE number 1818892 (Why is no real title available?)
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Cited in

(2)

• On a variational sequential bargaining pricing scheme
• Contingent claim pricing through a continuous time variational bargaining scheme

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