Y2K Bibliography of Experimental Economics and Social Science
Alternating Offer Bargaining Games

Charles A. Holt, cah2k@virginia.edu, suggestions and corrections welcome
(for online and personal use only)

Binmore, Kenneth, Peter Morgan, Avner Shaked, and John Sutton (1991) “Do People Exploit Their Bargaining Power? An Experimental Study,” Games and Economic Behavior, 3:3 (August), 295-322. Keywords: experiments, bargaining, alternating-offer bargaining. Email Contact: k.binmore@ucl.ac.uk

Binmore, Kenneth, Avner Shaked, and John Sutton (1985) “Testing Noncooperative Bargaining Theory: A Preliminary Study,” American Economic Review, 75:5 (December), 1178-1180. Keywords: experiments, bargaining, alternating-offer bargaining games, backward induction. Email Contact: k.binmore@ucl.ac.uk

Binmore, Kenneth, Avner Shaked, and John Sutton (1988) “A Further Test of Noncooperative Bargaining Theory:
Reply,” American Economic Review, 78:4 (September), 837-839. Keywords: experiments, bargaining, alternating-offer bargaining, backward induction. Email Contact: k.binmore@ucl.ac.uk

Goeree, Jacob K., and Charles A. Holt (1999) “Asymmetric Inequality Aversion and Noisy Behavior in Alternating-Offer Bargaining Games,” European Economic Review, forthcoming. Keywords: experiments, bargaining, alternating offer bargaining games, fairness, inequality aversion, logit equilibrium, asymmetric endowments, one-shot games. Abstract: The experiment involves a two-stage, alternating-offer bargaining game in which players receive asymmetric fixed money payments in addition to what they earn by bargaining. The endowments do not affect the perfect positive correlation between the initial subgame perfect offers and the remaining pie size. Endowments, however, are varied to produce a perfect negative relationship between the remaining pie size and the first stage offer that would equalize players' total payoffs. The negative relationship is apparent in the data, which indicates the importance of fairness considerations. An equilibrium model of noisy behavior and inequity aversion is used to provide estimates of utility and logit error parameters. Email Contact: jg2n@virginia.edu

Güth, Werner, Peter Ockenfels, and M. Wendel (1993) “Efficiency by Trust in Fairness? Multiperiod Ultimatum Bargaining Experiments with an Increasing Cake,” International Journal of Game Theory, 22:1 51-73. Keywords: experiments, bargaining, alternating offer, increasing pie, trust game. Email Contact: gueth@wiwi.hu-berlin.de

Güth, Werner, and Reinhard Tietz (1988) “Ultimatum Bargaining For a Shrinking Cake: An Experimental Analysis,” in Bounded Rational Behavior in Experimental Games and Markets, edited by R. Tietz, W. Albers and R. Selten, Berlin: Springer-Verlag, ***. Keywords: experiments, bargaining, alternating offer. Email Contact: gueth@wiwi.hu-berlin.de

Harrison, Glenn W., and Kevin A. McCabe (1992) “Testing Non-Cooperative Bargaining Theory in Experiments,” in Research in Experimental Economics, Vol. 5, edited by R. M. Isaac, Greenwich, Conn.: JAI Press, 137-169. Keywords: experiments, bargaining, alternating offer bargaining, fairness, backward induction. Abstract The experiments show that when subjects have prior experience in the subgames, their behavior conforms more closely to the subgame perfect Nash prediction in alternating-offer bargaining games. The authors argue that failure of subgame Nash predictions in previous experiments is due to the absence of common expectations about play in subgames, not to fairness concerns. Email Contact: harrison@darla.badm.sc.edu

Harrison, Glenn W., and Kevin A. McCabe (1996) “Expectations and Fairness in a Simple Bargaining Experiment,” International Journal of Game Theory, 25:3 303-327. Keywords: experiments, bargaining, alternating offer game, fairness, expectations. Email Contact: harrison@darla.badm.sc.edu

Neelin, Janet, Hugo Sonnenschein, and Matthew Speigel (1988) “A Further Test of Noncooperative Bargaining Theory: Comment,” American Economic Review, 78:4 (September), 824-836. Keywords: experiments, bargaining, alternating-offer games, ultimatum games.

Ochs, Jack, and Alvin E. Roth (1989) “An Experimental Study of Sequential Bargaining,” American Economic Review, 79:3 (June), 355-384. Keywords: experiments, bargaining, alternating-offer bargaining games, disadvantageous counter offers. Abstract: Data from two-stage alternating-offer bargaining games reveal departures from subgame Nash predictions. Of particular interest to subsequent theoretical work on inequity aversion was the observation of disadvantageous counteroffers, where a responder would make a counterproposal that demanded less than the offer just rejected. Email Contact: jochs@pitt.edu

Oosterbeek, Hessel, Joep Sonnemans, and Susan van Velzen (1998) “On Trust and Exploitation. Bargaining Behavior in Experiments with Endogenously and Exogenously Determined Threat Points,” University of Amsterdam, Discussion Paper, presented at the Summer 1998 ESA Meeting. Keywords: experiments, bargaining, threat points, trust. Abstract: The alternating-offer bargaining game begins with one subject choosing between two options, one of which offers a higher pie size but a strategic disadvantage (lower threat-point payoff) relative to the other subject. The focus is on whether the non-choosing subject reciprocates when the other chooses a high pie size. Email Contact: joeps@fee.uva.nl