Shachat, J. and Swarthout, J.T. (2013) 'Auctioning the right to play ultimatum games and the impact on equilibrium selection.', Games., 4 (4). pp. 738-753.
We auction scarce rights to play the Proposer and Responder positions in ultimatum games. As a control treatment, we randomly allocate these rights and charge exogenous participation fees. These participation fee sequences match the auction price sequence from a session of the original treatment. With endogenous selection via auctions, we find that play converges to a session-specific Nash equilibrium, and auction prices emerge supporting this equilibrium by the principle of forward induction. With random assignment, we find play also converges to a session-specific Nash equilibrium as predicted by the principle of loss avoidance. While Nash equilibria with low offers are observed, the subgame perfect Nash equilibrium never is.
|Keywords:||Ultimatum bargaining, Auction, Forward induction, Loss avoidance.|
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|Publisher Web site:||http://dx.doi.org/10.3390/g4040738|
|Publisher statement:||© 2013 by the authors; licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution license (http://creativecommons.org/licenses/by/3.0/).|
|Record Created:||13 Oct 2014 14:50|
|Last Modified:||14 Oct 2014 10:21|
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