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

Jason Shachat and J. Swarthout

No 2013-10-14, Working Papers from Wang Yanan Institute for Studies in Economics (WISE), Xiamen University

Abstract: We conduct an experiment in which we auction the scarce rights to play the Proposer and Responder positions in subsequent ultimatum games. As a control treatment, we randomly allocate these rights and then charge exogenous participation fees according to the auction price sequences observed in the auction treatment. With endogenous selection into ultimatum games via auctions, we find that play converges to a session-specific Nash equilibrium and auction prices emerge which support this equilibrium by the principle of forward induction. With random assignment and exogenous participation fees, we find play also converges to a session-specific Nash equilibrium as predicted by the principle of loss avoidance. The Nash equilibrium observed within a session results in low ultimatum game offers, but the subgame perfect Nash equilibrium is never observed.

Keywords: Ultimatum Bargaining; Auction; Forward Induction (search for similar items in EconPapers)
JEL-codes: C78 C92 D44 (search for similar items in EconPapers)
Date: 2013-10-14
New Economics Papers: this item is included in nep-exp, nep-gth and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published

Downloads: (external link)
https://econpub.xmu.edu.cn/research/repec/upload/201331855467055475115776.pdf (application/pdf)

Related works:
Journal Article: 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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wyi:wpaper:002056

Access Statistics for this paper

More papers in Working Papers from Wang Yanan Institute for Studies in Economics (WISE), Xiamen University
Bibliographic data for series maintained by WISE Technical Team ().