Evolution in Imperfect Commitment Bargaining - Strategic Versus Ignorant Types
11 Pages Posted: 2 May 2007
To commit in bargaining is crucial: in the ultimatum game with its one-sided commitment power the 'proposer' (almost) receives the whole pie while the 'responder' is left with (almost) nothing. When bargaining parties commit simultaneously the symmetric Nash (Econometrica, 1950, vol. 18, pp. 155-162) bargaining solution predicts equal shares. Continuously connecting these two games yields a one-parameter family of games (Fischer etal., Experimental Economics, 2006, vol. 9, pp. 17-33) for which we distinguish two behavioral dispositions, namely (1) neglecting commitment power and (2) reacting to it strategically. Their pay-off implications define the evolutionary set-up for which we derive the evolutionarily stable behavioral disposition. Our analysis sheds light on the hypothesis that in experiments participants neglect strategic aspects such as commitment power.
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