A Rubinstein bargaining experiment in continuous time

Ailin Leng

Games and Economic Behavior, 2023, vol. 140, issue C, 115-131

Abstract: I conduct a bargaining experiment with discounting in continuous time. At any point in time, each of the two players can make a proposal. However, after making an offer, a player must wait for a specific duration of “waiting time” before she can make a new offer or accept the other's offer. In addition, the player's share is discounted by her discount rate for every unit of time. In the equilibrium, the agreement is reached immediately, and a player's share increases with her waiting time and decreases with her discount rate. Results show that a longer waiting time or a lower discount rate alone increases a player's proportion of the actual payoff, but the combination of the two factors has a weaker effect.

Keywords: Continuous time; Rubinstein bargaining; Laboratory experiment (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:140:y:2023:i:c:p:115-131

DOI: 10.1016/j.geb.2023.03.005

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