Learning to Bargain

William Harbaugh (), Kate Krause () and Lise Vesterlund ()
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Kate Krause: University of New Mexico Economics Department

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: This paper studies how children learn to bargain. We performed simple anonymous bargaining experiments with real payoffs with 256 children from age 8 to 18. On average, offers by even the youngest children were close to optimal, given the responses. Both offers and responses were similar to the results that others have reported for adults. Younger children showed more variance in the size of proposals. Children showed clear evidence of reinforcement learning, responding to a rejection by increasing subsequent proposals. This pattern was strongest for the youngest children, who tended to over-react to rejections. We found mixed support for social cognitive theory: while proposals increased after other children made larger proposals, they did not increase after proposals by others were rejected.

Keywords: bargaining; learning; children; ultimatum game. (search for similar items in EconPapers)
JEL-codes: D80 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-mic
Date: 2003-11-01
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Related works:
Journal Article: Learning to bargain (2007)
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