Non-cooperative Bargaining with Unsophisticated Agents

In a conventional non-cooperative negotiating scenario, two or more forward-thinking participants make offers and counteroffers alternately until an agreement is achieved, with a penalty taking into account the length of time it takes players to make a decision. We provide a game that helps myopic participants achieve equilibrium as if they were forward-thinking agents. One of the game’s main mechanics is that players are penalized for deviating from their prior best reply plan as well as for the amount of time they spend to make decisions at each stage of play. Our chapter adds to existing research on typical myopic agent bargaining while also broadening the class of processes and functions that may be used to define and apply Rubinstein’s non-cooperative bargaining solutions.