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Trust in generosity: An experiment of the repeated Yes-No game

Author

Listed:
  • Werner Güth

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Hironori Otsubo

    (Soka University)

Abstract

This paper reports results of a 100-round Yes-No game experiment conducted under the random matching protocol. In contrast to ultimatum bargaining, the responder in the Yes-No game decides whether to accept without knowing the proposer's offer. Although both games have the same solution outcome (i.e., the proposer offers the smallest possible amount and the responder accepts), the set of equilibria of the ultimatum bargaining game is rather large whereas the equilibrium of the Yes-No game is essentially unique. Avrahami et al. (2013) found an immediate convergence to proposers offering an equal split in their repeated ultimatum bargaining experiment. Our main interest is which dynamics emerge when proposers and responders repeatedly play the Yes-No game. We found neither convergence to offering an equal split nor to the solution outcome. Most participants display a surprising constancy of behavior but the categories of behavior are rather rich.

Suggested Citation

  • Werner Güth & Hironori Otsubo, 2014. "Trust in generosity: An experiment of the repeated Yes-No game," Jena Economic Research Papers 2014-024, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2014-024
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Yes-No game; Repetition; Learning; Veto power; Laboratory experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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