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Invariance failure under subgame perfectness in sequential bargaining

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  • Zwick, Rami
  • Rapoport, Amnon
  • Weg, Eythan

Abstract

A basic property of any normative theory of decision making --- individual or group --- is its invariance under the theory's own equivalence specification. Growing evidence from experimental studies in several areas of game playing indicates that the game-theoretic notion of strategic equivalence is systematically violated in the behavioral arena. The present study expands the design of previous studies of bilateral bargaining by including a third party and a new trading rule - -- modifications which induce behavioral patterns that reject equivalence under subgame perfection
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Suggested Citation

  • Zwick, Rami & Rapoport, Amnon & Weg, Eythan, 2000. "Invariance failure under subgame perfectness in sequential bargaining," Journal of Economic Psychology, Elsevier, vol. 21(5), pages 517-544, October.
  • Handle: RePEc:eee:joepsy:v:21:y:2000:i:5:p:517-544
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    References listed on IDEAS

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    6. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    7. Weg, Eythan & Zwick, Rami, 1991. "On the rebustness of perfect equilibrium in fixed cost sequential bargaining under an isomorphic transformation," Economics Letters, Elsevier, vol. 36(1), pages 21-24, May.
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    Cited by:

    1. Rami Zwick & Amnon Rapoport & Alison King Chung Lo & A. V. Muthukrishnan, 2001. "Consumer Search: Not Enough Or Too Much?," Experimental 0110002, EconWPA.
    2. Parco, James E. & Murphy, Ryan O., 2013. "Resistance to truthful revelation in bargaining: Persistent bid shading and the play of dominated strategies," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 154-170.
    3. Jiwoong Shin & Dan Ariely, 2004. "Keeping Doors Open: The Effect of Unavailability on Incentives to Keep Options Viable," Management Science, INFORMS, vol. 50(5), pages 575-586, May.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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