Strategic uncertainty aversion in bargaining — Experimental evidence

Ben Greiner

Journal of Economic Psychology, 2023, vol. 95, issue C

Abstract: In a series of four experiments I demonstrate the existence of significant aversion to basically non-existent strategic uncertainty in very simple bargaining games. This aversion goes far beyond ordinary risk or ambiguity aversion. Specifically, although almost nobody expects or chooses the rejection of an offered equal split in a bargaining game, participants behave as if there would be a considerably large rejection rate for equal splits. This behavior is robust across experimental designs and subject pools, can lead to inefficiencies in markets, and is incompatible with consistency of strategies and rational beliefs.

Keywords: Strategic risk; Strategic uncertainty; Ultimatum game; Dictator game; Impunity game; Bounded rationality (search for similar items in EconPapers)
JEL-codes: C72 C92 D3 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:95:y:2023:i:c:s0167487023000053

DOI: 10.1016/j.joep.2023.102604

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