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Conventional Contracts, Intentional behavior and Logit Choice: Equality Without Symmetry

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  • Hwang, Sung-Ha
  • Lim, Wooyoung
  • Neary, Philip
  • Newton, Jonathan

Abstract

When coordination games are played under the logit choice rule and there is intentional bias in agents’ non-best response behavior, the Egalitarian bargaining solution emerges as the long run social norm. Without intentional bias, a new solution, the Logit bargaining solution emerges as the long run norm. These results contrast with results under non-payoff dependent deviations from best response behavior, where it has previously been shown that the Kalai-Smorodinsky and Nash bargaining solutions emerge as long run norms. Experiments on human subjects suggest that non-best response play is payoff dependent and displays intentional bias. This suggests the Egalitarian solution as the most likely candidate for a long run bargaining norm.

Suggested Citation

  • Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2016. "Conventional Contracts, Intentional behavior and Logit Choice: Equality Without Symmetry," Working Papers 2016-13, University of Sydney, School of Economics.
  • Handle: RePEc:syd:wpaper:2016-13
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    1. repec:spr:joecth:v:64:y:2017:i:3:d:10.1007_s00199-016-0988-x is not listed on IDEAS
    2. repec:spr:joecth:v:65:y:2018:i:4:d:10.1007_s00199-017-1047-y is not listed on IDEAS
    3. Sung-Ha Hwang & Jonathan Newton, 2017. "Payoff-dependent dynamics and coordination games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(3), pages 589-604, October.
    4. repec:eee:mateco:v:78:y:2018:i:c:p:96-104 is not listed on IDEAS
    5. repec:eee:gamebe:v:113:y:2019:i:c:p:633-650 is not listed on IDEAS
    6. Ennio Bilancini & Leonardo Boncinelli, 2018. "Social coordination with locally observable types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 975-1009, June.

    More about this item

    Keywords

    Evolution; Nash program; Logit choice; Egalitarianism;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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