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Evolution in Imperfect Commitment Bargaining – Strategic versus Ignorant Types -

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  • 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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    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
    2. Sven Fischer & Werner Güth & Wieland Müller & Andreas Stiehler, 2006. "From ultimatum to Nash bargaining: Theory and experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 9(1), pages 17-33, April.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    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.
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    More about this item

    Keywords

    bargaining; imperfect commitment; ultimatum game; Nash demand game; evolutionary game theory;
    All these keywords.

    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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