Decision Processes in Economics pp 28-33 | Cite as
Bargaining on the Goodwin Model
Abstract
The 1967 Goodwin model is a prey-predator type model representing the competition among capitalists and workers for the employment rate and for the workers’ income share. Recently it is been studied in a noncooperative dynamic game setting by Balbucci, Candela and Ricci [1]. They found that it is not possible to eliminate the Cycle but it is possible to locate the Golden Age point in a position where the employment rate value is determined by workers while the profit level by capitalists. Unfortunatelly the game is of infinite duration. Aim of this paper is to investigate the possibility for each player to force both components of the critic point. It is natural to formulate the game as a bargaining game and to look for the Kalai, Smorodinski solution.
Keywords
Employment Rate Bargaining Solution Income Share Bargaining Game Finite HorizonPreview
Unable to display preview. Download preview PDF.
References
- [1]R. Balducci, G. Candela, G. Ricci, “A generalization of R.M. Goodwin Model with Rational Behaviour of Economic Agents”, in Goodwin, Krugger, Vercelli “Nonlinear Models of Fluctuating Growth”, Springer Verlag Lect. Notes in Econ. and Math Syst. 228, 1984Google Scholar
- [2]T. Basar, “On the uniqueness of Nash solution for linear-quadratic games”, Int. Journal of Game Theory, 1976Google Scholar
- [3]R.M. Goodwin, “A Growth Cycle”,in Socialism, Capitalism and Economic Growth, by C.H. Feinstein, 1967Google Scholar
- [4]E. Kalai, M. Smorodinski, “Other solutions to Nash’s bargaining problem”, Econometrica 43, 1975Google Scholar
- [5]C.A. Magni, G. Ricci, “Reputation and Credibility”, proceedings of Optimization Days, Montreal,1989Google Scholar
- [6]G. Ricci, “Applications of Mathematics to the Goodwin model”, in G. Ricci, K. Velupfflai, “Growth Cycles and Multisectoral Economics: the Goodwin tradition”, Springer Verlag, Lect Notes in Econ. and Math. Syst.309, 1988Google Scholar