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Evolution in Imperfect Commitment Bargaining – Strategic versus Ignorant Types -

Author

Listed:
  • Sven Fischer
  • Werner Güth
  • Kerstin Pull

Abstract

To commit credibly in bargaining is crucial: In the ultimatum game with its one-sided early commitment power the “proposer” gets (nearly) the whole pie while the “responder” is left with (almost) nothing. When both parties commit simultaneously the (a)symmetric Nash(1950)-bargaining solution, however, predicts (more or less) equal shares. Relying on a continuous connection of these two games by a one parameter-family of games (Fischer et al. 2003), we distinguish two behavioral dispositions, namely (1) neglecting early commitment and (2) reacting to it strategically. Based on their payoff implications we derive the evolutionarily stable behavioral disposition. This sheds new light on the hypothesis that in experiments participants neglect subtle aspects like the sequence of moves.

Suggested Citation

  • Sven Fischer & Werner Güth & Kerstin Pull, 2003. "Evolution in Imperfect Commitment Bargaining – Strategic versus Ignorant Types -," Papers on Strategic Interaction 2003-20, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2003-20
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    JEL classification:

    • 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

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