IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Reinforcement-Based Adaptive Learning in Asymmetric Two-Person Bargaining with Incomplete Information

  • Amnon Rapoport

    ()

  • Terry Daniel

    ()

  • Darryl Seale

    ()

The sealed bid k-double auction is a mechanism used to structure bilateral bargaining under two-sided incomplete information. This mechanism is tested in two experiments in which subjects are asked to bargain repeatedly for 50 rounds with the same partner under conditions of information disparity favoring either the buyer (Condition BA) or seller (Condition SA). Qualitatively, the observed bid and offer functions are in agreement with the Bayesian linear equilibrium solution (LES) constructed by Chatterjee and Samuelson (1983). A trader favored by the information disparity, whether buyer or seller, receives a larger share of the realized gain from trade than the other trader. Comparison with previous results reported by Daniel, Seale, and Rapoport (1998), who used randomly matched rather than fixed pairs, shows that when reputation effects are present this advantage is significantly enhanced. A reinforcement-based learning model captures the major features of the offer and bid functions, accounting for most of the variability in the round-to-round individual decisions. Copyright Kluwer Academic Publishers 1998

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1023/A:1009903210510
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Experimental Economics.

Volume (Year): 1 (1998)
Issue (Month): 3 (December)
Pages: 221-253

as
in new window

Handle: RePEc:kap:expeco:v:1:y:1998:i:3:p:221-253
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102888

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.:

as in new window
  1. Reinhard Selten & Michael Mitzkewitz & Gerald R. Uhlich, 1997. "Duopoly Strategies Programmed by Experienced Players," Econometrica, Econometric Society, vol. 65(3), pages 517-556, May.
  2. Schotter, Andrew, 1990. "Bad And Good News About The Sealed-Bid Mechanism: Some Experimental Results," Working Papers 90-04, C.V. Starr Center for Applied Economics, New York University.
  3. A. Roth & I. Er’ev, 2010. "Learning in Extensive Form Games: Experimental Data and Simple Dynamic Models in the Intermediate Run," Levine's Working Paper Archive 387, David K. Levine.
  4. Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
  5. Radner, Roy & Schotter, Andrew, 1987. "The Sealed-Bid Mechanism: An Experimental Study," Working Papers 87-41, C.V. Starr Center for Applied Economics, New York University.
  6. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  7. Satterthwaite, Mark A. & Williams, Steven R., 1989. "Bilateral trade with the sealed bid k-double auction: Existence and efficiency," Journal of Economic Theory, Elsevier, vol. 48(1), pages 107-133, June.
  8. Selten, Reinhard & Joachim Buchta, 1994. "Experimental Sealed Bid First Price Auctions with Directly Observed Bid Functions," Discussion Paper Serie B 270, University of Bonn, Germany.
  9. Wilson, Robert B, 1985. "Incentive Efficiency of Double Auctions," Econometrica, Econometric Society, vol. 53(5), pages 1101-15, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:expeco:v:1:y:1998:i:3:p:221-253. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.