Evolution in Imperfect Commitment Bargaining - Strategic Versus Ignorant Types

11 Pages Posted: 2 May 2007

See all articles by Sven Fischer

Sven Fischer

University of Newcastle - Economics

Werner Guth

Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Kerstin Pull

University of Tuebingen - School of Business and Economics

Abstract

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.

Suggested Citation

Fischer, Sven and Güth, Werner and Pull, Kerstin, Evolution in Imperfect Commitment Bargaining - Strategic Versus Ignorant Types. Metroeconomica, Vol. 58, No. 2, pp. 299-309, May 2007. Available at SSRN: https://ssrn.com/abstract=981597 or http://dx.doi.org/10.1111/j.1467-999X.2007.00269.x

Sven Fischer (Contact Author)

University of Newcastle - Economics ( email )

Newcastle-upon-Tyne NE1 7RU
United Kingdom

Werner Güth

Max Planck Institute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Kerstin Pull

University of Tuebingen - School of Business and Economics ( email )

Nauklerstr. 47
Tuebingen, D-72074
Germany

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