We investigate the intertemporal allocation behavior of spouses with different deterministic life expectations in an experiment. In each period of their life both partners propose a consumption level of which one is then randomly implemented. In spite of the complex dynamics optimal behavior is rather simple and straightforward in the sense of conditional consumption smoothing. A substantial number of participants does not care whether their partner receives any payoff. This selfish behavior is punished by their partners.On average participants stay on egoistic consuption paths, although in later periods their behavior shifts in the direction of consumption paths leading to equal payoffs.
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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number
2002-02.
Find related papers by JEL classification: C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
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