Skip to main content

Research Repository

Advanced Search

Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection

Shachat, J.; Swarthout, J.T.

Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection Thumbnail


Authors

J.T. Swarthout



Abstract

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.

Citation

Shachat, J., & Swarthout, J. (2013). Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection. Games, 4(4), 738-753. https://doi.org/10.3390/g4040738

Journal Article Type Article
Publication Date Nov 27, 2013
Deposit Date Sep 17, 2014
Publicly Available Date Oct 14, 2014
Journal Games
Publisher MDPI
Peer Reviewed Peer Reviewed
Volume 4
Issue 4
Pages 738-753
DOI https://doi.org/10.3390/g4040738
Keywords Ultimatum bargaining, Auction, Forward induction, Loss avoidance.
Public URL https://durham-repository.worktribe.com/output/1445314

Files





You might also like



Downloadable Citations