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An Experimental Study of Self-Enforcing Coalitions

Author

Listed:
  • Karl Jandoc

    (University of the Philippines School of Economics, Encarnación Hall, Osmeña cor. Guerrero Sts., Diliman, Quezon City 1101, Philippines)

  • Ruben Juarez

    (Department of Economics, University of Hawaii, 2424 Maile Way, Saunders Hall 542, Honolulu, HI 96822, USA)

Abstract

We study a model in which agents endowed with power compete for a divisible resource by forming coalitions with other agents. The coalition with the greatest power wins the resource and divides it among its members via proportional sharing. We conduct an economic experiment using this model to investigate possible behavioral factors that may explain deviations from theoretical predictions. The main findings show that agents display rational behavior when forming coalitions, especially when they know that a large proportion of their opponents play myopic strategies from the outset. Over time, however, agents learn to behave more strategically and even more rationally, thus enabling agents to display more of the behavior predicted by the coalition formation model with farsighted agents.

Suggested Citation

  • Karl Jandoc & Ruben Juarez, 2019. "An Experimental Study of Self-Enforcing Coalitions," Games, MDPI, vol. 10(3), pages 1-32, August.
    • Handle: RePEc:gam:jgames:v:10:y:2019:i:3:p:31-:d:254013
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    References listed on IDEAS

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    Cited by:

    1. Kristal K. Trejo & Ruben Juarez & Julio B. Clempner & Alexander S. Poznyak, 2023. "Non-Cooperative Bargaining with Unsophisticated Agents," Computational Economics, Springer;Society for Computational Economics, vol. 61(3), pages 937-974, March.

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