Evolution in Imperfect Commitment Bargaining – Strategic versus Ignorant Types -

Sven Fischer, Werner Güth () and Kerstin Pull

Discussion Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: To commit credibly in bargaining is crucial: In the ultimatum game with its one-sided early commitment power the “proposer” gets (nearly) the whole pie while the “responder” is left with (almost) nothing. When both parties commit simultaneously the (a)symmetric Nash(1950)-bargaining solution, however, predicts (more or less) equal shares. Relying on a continuous connection of these two games by a one parameter-family of games (Fischer et al. 2003), we distinguish two behavioral dispositions, namely (1) neglecting early commitment and (2) reacting to it strategically. Based on their payoff implications we derive the evolutionarily stable behavioral disposition. This sheds new light on the hypothesis that in experiments participants neglect subtle aspects like the sequence of moves.

Keywords: bargaining; imperfect commitment; ultimatum game; Nash demand game; evolutionary game theory (search for similar items in EconPapers)
JEL-codes: C72 C78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2003-09
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ftp://papers.mpiew-jena.mpg.de/esi/discussionpapers/2003-20.pdf (application/pdf)

Related works:
Journal Article: EVOLUTION IN IMPERFECT COMMITMENT BARGAINING-STRATEGIC VERSUS IGNORANT TYPES (2007)
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