Next Article in Journal
External Pressure on Alliances: What Does the Prisoners’ Dilemma Reveal?
Previous Article in Journal
A Game-Theoretic Analysis of Baccara Chemin de Fer
Games 2013, 4(4), 738-753; doi:10.3390/g4040738
Article

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

1
 and
2,*
1 Wang Yanan Institute for Studies in Economics (WISE) and the MOE Key Laboratory in Econometrics, Xiamen University, Xiamen 361005, Fujian, China 2 Department of Economics, Georgia State University, Atlanta, GA 30303, USA
* Author to whom correspondence should be addressed.
Received: 23 September 2013 / Revised: 25 October 2013 / Accepted: 11 November 2013 / Published: 27 November 2013
View Full-Text   |   Download PDF [731 KB, uploaded 27 November 2013]   |   Browse Figures
SciFeed

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.
Keywords: ultimatum bargaining; auction; forward induction; loss avoidance ultimatum bargaining; auction; forward induction; loss avoidance
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

Share & Cite This Article

Further Mendeley | CiteULike
Export to BibTeX |
EndNote |
RIS
MDPI and ACS Style

Shachat, J.; Swarthout, J.T. Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection. Games 2013, 4, 738-753.

View more citation formats

Related Articles

Article Metrics

For more information on the journal, click here

Comments

[Return to top]
Games EISSN 2073-4336 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert