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

Jason Shachat and J. Swarthout

Games, 2013, vol. 4, issue 4, 1-16

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.

Keywords: ultimatum bargaining; auction; forward induction; loss avoidance (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Auctioning the right to play ultimatum games and the impact on equilibrium selection (2013)
Working Paper: Auctioning the right to play ultimatum games and the impact on equilibrium selection (2013)
Working Paper: Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection (2013)
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