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No Switchbacks: Rethinking Aspiration-Based Dynamics in the Ultimatum Game

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Author Info
Jeffrey Carpenter ()
Peter Hans Matthews ()

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Abstract

Aspiration-based evolutionary dynamics have recently been used to model the evolution of fair play in the ultimatum game showing that incredible threats to reject low offers persist in equilibrium. We focus on two extensions of this analysis: we experimentally test whether assumptions about agent motivations (aspiration levels) and the structure of the game (binary strategy space) reflect actual play, and we examine the problematic assumption embedded in the standard replicator dynamic that unhappy agents who switch strategies may return to a rejected strategy without exploring other options. We find that the resulting "no switchback" dynamic predicts the evolution of play better than the standard dynamic and that aspirations are a significant motivator for our participants. In the process, we also construct and analyze a variant of the ultimatum game in which players can adopt conditional (on their induced aspirations) stategies.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0218R.pdf
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Publisher Info
Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0218r.

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Length: 36 pages
Date of creation: Feb 2003
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Handle: RePEc:mdl:mdlpap:0218r

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Related research
Keywords: ultimatum game; learning; aspirations; replicator dynamics; experiment;

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Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Karandikar, Rajeeva & Mookherjee, Dilip & Ray, Debraj & Vega-Redondo, Fernando, 1998. "Evolving Aspirations and Cooperation," Journal of Economic Theory, Elsevier, vol. 80(2), pages 292-331, June. [Downloadable!] (restricted)
  2. Prasnikar, Vesna & Roth, Alvin E, 1992. "Considerations of Fairness and Strategy: Experimental Data from Sequential Games," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 865-88, August. [Downloadable!] (restricted)
  3. Jeffrey Carpenter, 2002. "Bargaining Outcomes as the Result of Coordinated Expectations: An Experimental Study of Sequential Bargaining," Middlebury College Working Paper Series 0204, Middlebury College, Department of Economics. [Downloadable!]
  4. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December. [Downloadable!] (restricted)
  5. Bolton Gary E. & Zwick Rami, 1995. "Anonymity versus Punishment in Ultimatum Bargaining," Games and Economic Behavior, Elsevier, vol. 10(1), pages 95-121, July. [Downloadable!] (restricted)
  6. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, December.
  7. Friedman, Daniel, 1996. "Equilibrium in Evolutionary Games: Some Experimental Results," Economic Journal, Royal Economic Society, vol. 106(434), pages 1-25, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jeffrey Carpenter & Peter Matthews, 2002. "Social Reciprocity," Middlebury College Working Paper Series 0229, Middlebury College, Department of Economics. [Downloadable!]
    Other versions:
  2. Hassan Benchekroun & Ngo Van Long, 2006. "The Build-up of Cooperative Behavior among Non-cooperative Agents," CIRANO Working Papers 2006s-17, CIRANO. [Downloadable!]
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