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A Rubinstein bargaining experiment in continuous time

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  • Leng, Ailin

Abstract

I conduct a bargaining experiment with discounting in continuous time. At any point in time, each of the two players can make a proposal. However, after making an offer, a player must wait for a specific duration of “waiting time” before she can make a new offer or accept the other's offer. In addition, the player's share is discounted by her discount rate for every unit of time. In the equilibrium, the agreement is reached immediately, and a player's share increases with her waiting time and decreases with her discount rate. Results show that a longer waiting time or a lower discount rate alone increases a player's proportion of the actual payoff, but the combination of the two factors has a weaker effect.

Suggested Citation

  • Leng, Ailin, 2023. "A Rubinstein bargaining experiment in continuous time," Games and Economic Behavior, Elsevier, vol. 140(C), pages 115-131.
    • Handle: RePEc:eee:gamebe:v:140:y:2023:i:c:p:115-131
    DOI: 10.1016/j.geb.2023.03.005
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    More about this item

    Keywords

    Continuous time; Rubinstein bargaining; Laboratory experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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