Conventional Contracts, Intentional Behavior and Logit Choice: Equality Without Symmetry
36 Pages Posted: 8 Nov 2017
Date Written: August 3, 2016
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.
Keywords: Evolution, Nash Program, Logit Choice, Egalitarianism
JEL Classification: C73, C78
Suggested Citation: Suggested Citation