From Ultimatum to Nash Bargaining: Theory and Experimental Evidence
AbstractWe examine the strategic behavior of first and second movers in a two party bargaining game with uncertain information transmission. When the first mover states her demand she does only know the probability with which the second mover will be informed about it. If the second mover is informed, she can either accept or reject the offer and payoffs are determined as in the ultimatum game. If she is not informed, the second mover states her own demand and payoffs are determined as in the Nash demand game. In the experiment we vary the commonly known probability of information transmission. Our main finding is that first movers' and uninformed second movers' demands adjust to this probability as qualitatively predicted, that is, first movers' (uninformed second movers') demands are lower (higher) the lower the probability of a signal.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2003-07.
Length: 32 pages
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- Sven Fischer & Werner GÃ¼th & Wieland MÃ¼ller & Andreas Stiehler, 2006. "From ultimatum to Nash bargaining: Theory and experimental evidence," Experimental Economics, Springer, vol. 9(1), pages 17-33, April.
- Fischer, S. & Güth, W. & Stiehler, A. & Müller, W., 2003. "From Ultimatum to Nash Bargaining: Theory and Experimental Evidence," Discussion Paper 2003-41, Tilburg University, Center for Economic Research.
- Fischer, S. & Güth, W. & Müller, W. & Stiehler, A., 2006. "From ultimatum to Nash bargaining: Theory and experimental evidence," Open Access publications from Tilburg University urn:nbn:nl:ui:12-193644, Tilburg University.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-13 (All new papers)
- NEP-EXP-2003-04-13 (Experimental Economics)
- NEP-GTH-2003-04-13 (Game Theory)
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