Professor Jason Shachat jason.shachat@durham.ac.uk
Professor
Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection
Shachat, J.; Swarthout, J.T.
Authors
J.T. Swarthout
Abstract
We auction scarce rights to play the Proposer and Responder positions in ultimatum games. As a control treatment, we randomly allocate these rights and charge exogenous participation fees. These participation fee sequences match the auction price sequence from a session of the original treatment. With endogenous selection via auctions, we find that play converges to a session-specific Nash equilibrium, and auction prices emerge supporting this equilibrium by the principle of forward induction. With random assignment, we find play also converges to a session-specific Nash equilibrium as predicted by the principle of loss avoidance. While Nash equilibria with low offers are observed, the subgame perfect Nash equilibrium never is.
Citation
Shachat, J., & Swarthout, J. (2013). Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection. Games, 4(4), 738-753. https://doi.org/10.3390/g4040738
Journal Article Type | Article |
---|---|
Publication Date | Nov 27, 2013 |
Deposit Date | Sep 17, 2014 |
Publicly Available Date | Oct 14, 2014 |
Journal | Games |
Publisher | MDPI |
Peer Reviewed | Peer Reviewed |
Volume | 4 |
Issue | 4 |
Pages | 738-753 |
DOI | https://doi.org/10.3390/g4040738 |
Keywords | Ultimatum bargaining, Auction, Forward induction, Loss avoidance. |
Public URL | https://durham-repository.worktribe.com/output/1445314 |
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Publisher Licence URL
http://creativecommons.org/licenses/by/3.0/
Copyright Statement
© 2013 by the authors; licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution license<br />
(http://creativecommons.org/licenses/by/3.0/).
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