Approaching core solutions by means of continuous bargaining

Abstract

We exhibit a continuous-time adjustment process in cooperative games (on characteristic form) which, under broad hypothesis, is shown to converge towards core solutions. The process lends itself to a natural interpretation: While the payoff is still outside the core, at least some dissatisfied player(s) succeeds in marginally improving his lot. Exactly who will thus obtain how much is a matter of ability and willingness to complain or respond to dissatisfaction,- and this can modelled in various ways. We identify conditions which ensure convergence asymptotically (at exponential rate or not) or in finite time.