Do People Make Strategic Moves? Experimental Evidence on Strategic Information Avoidance

Abstract:     
The strategic commitment moves that game theory predicts players make may sometimes seem counter-intuitive. We therefore conducted an experiment to see if people make the predicted strategic move. The experiment uses a simple bargaining situation. A player can make a strategic move of committing to not seeing what another player will demand. Our data show that subjects do, but only after substantial time, learn to make the predicted strategic move. We find only weak evidence of physical timing effects.

Number of Pages in PDF File: 20

Keywords: strategic moves, commitment, bargaining, strategic value of information, physical timing effects, endogenous timing, experiment

JEL Classification: C72, C78, C90, C92, D63, D80

working papers series