Bettina Kuon

The Experimental Design

The experiment was conducted at the Bonn Laboratory of Experimental Economics. The subjects were mostly students of economics and law who never participated in a twoperson bargaining game before. They were informed about the bargaining rules in a 20 minutes introductory session (for details, see Appendix A). This introduction also provided the information about the point to cash rate and the subjects were told that their objective should be the maximization of their payoffs. Afterwards they were seated in separate cubicles in the laboratory. Each cubicle was equipped with a computer terminal which was connected via a network to the other terminals. The interaction of the subjects was controlled by the terminal program. The bargaining was anonymous, which means that a subject neither knew the name of the opponent nor the cubicle he was seated in. The communication between the subjects was restricted to the formal interactions of proposing, accepting, and breaking off. No verbal communication was permitted. The information provided on the computer screen consisted of the alternative of the player, the coalition value, and the complete history of the bargaining process. The subjects had no access to information about games in which they were not participants.

Demand commitment bargaining in three-person quota game experiments

SummaryThe paper reports results of experiments on three-person quota games without the grand coalition and with zero values for the one-person coalitions. The experimental procedure used is the demand commitment model. This model generates finite extensive games with perfect information whose neutral equilibrium point predicts quota agreements. The termneutral means that at every decision point all locally optimal choices are taken with equal probability. Quota agreements do not perform better than equal division payoff bounds, but nevertheless the experiments show that quotas have some behavioral relevance. The demand commitment model seems to favor learning of the quota concept if subjects have the opportunity to gain experience by frequently playing the same game.

Measuring the typicalness of behavior

Abstract The importance of a characteristic for the description of the typical behavior of a group of experimental subjects is expressed by its typicity. The typicity of a subject indicates the extent to which its behavior is typical. A method for the determination of typicities was proposed in Selten. (Discussion paper B-106, University of Bonn, 1988). Their definition is based on an intuitive justification and cannot answer questions concerning the uniqueness and the mathematical properties of the typicities. The entirely different approach of a least squares approximation of the connection between the subjects and the characteristics leads to the same typicities and allows the formulation of a sufficient condition for uniqueness.

Two-Person Bargaining with Incomplete Information

This chapter starts with the presentation of the two-person bargaining game with incomplete information which is investigated in this book. In Section 2.2 this special problem will be related to the literature on bargaining games with incomplete information. Especially, we shall discuss a similar bargaining problem, for which a game theoretic solution is already known.

The Agreement Outcomes

This chapter is dedicated to the analysis of the agreement outcomes in the game playing experiment. They will be taken as given, which means it will not be investigated how they emerged (this will be the task of the following chapters).

Individual Adaptation to Experience

This chapter investigates the individual reaction of a player to experience. The first part gives a qualitative description of this adaptation and the second part discusses some quantitative aspects.

A Picture of the Subjects’ Behavior

In this chapter we summarize the most important results of the evaluation of the data of the game playing experiment (in the first section), and give a qualitative overall picture of the observed behavior (in the second section).

Typicalness of the Final Strategies

In the previous chapter a first analysis of the final strategies was done by studying the average payoffs of the four different types of players which emerged from the strategies. In this chapter we shall investigate the algorithms of the final strategies. It is our aim to draw a picture of the typical strategy. After the introduction of the method of measuring the typicalness of behavior in Section 13.1, we shall apply this method to the final strategies in order to give a picture of the typical strategy (Sections 13.3 to 13.5) and discuss the results of the analysis in Section 13.6. Section 13.2 contains some notes on the evaluation of the typicalness.

Related Bargaining Experiments

In the experimental literature there is only a small number of investigations on game situations which involve incomplete information. Although they are all different from our experiment we shall very briefly report their findings in order to analyze similarities to ours.

The Strategy Experiment

In the Winter term 1991/92 we conducted a strategy experiment for the two-person bargaining problem with incomplete information at the Bonn Laboratory of Experimental Economics in the framework of a student’s seminar. A strategy experiment is designed to gain strategies for a certain problem from highly experienced subjects. Game playing experiments, in contrast, explore the spontaneous behavior, and even in the case of experienced subjects the experimenter only observes the actions of the subjects and is not able to identify the strategies they emerge from.