This model implements the spatial Nash bargaining game of “Bargaining with Neighbors: Is Justice Contagious?” (Alexander and Skyrms, 1999), explored at greater length in both “Evolutionary Explanations of Distributive Justice” (Alexander, 2000) and The Structural Evolution of Morality (Alexander, 2007).
Consider an population of boundedly rational agents positioned on a two-dimensional lattice. (I.e., as if these agents were living in Manhattan.) Each agent is endowed with a strategy that they use to play the Nash bargaining game with their eight nearest neighbors. At the end of each round of play, agents compare their total payoff earned in the last round of interaction with the payoffs received by each of their nearest neighbors. If it should turn out that the maximal payoff earned by one of the agent's neighbours exceeds the payoff earned by the agent, then that agent will adopt a new strategy using the heuristic of Imitate-The-Best. (If there was a tie for the maximal payoff, then the agent chooses a new strategy a random from the set of maximally scoring strategies.)
The Nash Bargaining game.
In the form considered here, we assume that two players need to decide how to divide a resource (say, a cake) sliced into 10 pieces. Each agent’s strategy is simply the number of pieces of cake she wants. The two agents submit their strategies to a neutral third party who allocates cake according to the following rules:
- If the sum of the two players’ strategies does not exceed the total amount of cake available, each agent receives the amount she wants.
- If the sum of the two players’ strategies does exceed the total amount of cake available, neither agent receives anything (and the cake vanishes).