Unequal Outside Options in the Lost Wallet Game

University of Canterbury Working Paper

14 Pages Posted: 14 Apr 2008 Last revised: 19 Oct 2009

See all articles by Maroš Servátka

Maroš Servátka

Macquarie Graduate School of Management - MGSM Experimental Economics Laboratory

Radovan Vadovic

Carleton University

Date Written: October 14, 2009

Abstract

Experimental evidence suggests the size of the foregone outside option of the first mover does not affect the behavior of the second mover in the lost wallet game. In this paper we experimentally compare the behavior of subjects when they face an outside option with unequal payoffs, i.e., the first mover gets 10 and the second mover gets 0, and when they face an outside option with equal payoffs, i.e., both get 5. Consistent with the most of the literature we do not find a significant difference in behavior of second movers.

Keywords: Experimental economics, fairness, inequality, lost wallet game, outside option

JEL Classification: C72, C78, C91

Suggested Citation

Servátka, Maroš and Vadovic, Radovan, Unequal Outside Options in the Lost Wallet Game (October 14, 2009). University of Canterbury Working Paper, Available at SSRN: https://ssrn.com/abstract=1120074 or http://dx.doi.org/10.2139/ssrn.1120074

Maroš Servátka (Contact Author)

Macquarie Graduate School of Management - MGSM Experimental Economics Laboratory ( email )

Sydney
Australia

Radovan Vadovic

Carleton University ( email )

1125 Colonel By Drive
Ottawa, Ontario K1S 5B6
Canada