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Belief Updating in Sequential Games of Two-Sided Incomplete Information: An Experimental Study of a Crisis Bargaining Model

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  • Tingley, Dustin H.
  • Wang, Stephanie W.

Abstract

We investigate theoretically and experimentally the crisis bargaining model, a dynamic game of two-sided incomplete information with player types drawn from a commonly known distribution. Little work has been done to analyze whether and how players update their beliefs in such games.Within the experiment we elicited beliefs from players about their opponent's type using a proper scoring rule. We implement two treatments that vary the cost of backing down to the first mover after initial entry, generating sharp comparative static predictions in both beliefs and strategies. We find that players do update their beliefs in the predicted directions after observing some of the action choices. However, we highlight evidence of conservative updating relative to rational expectations.

Suggested Citation

  • Tingley, Dustin H. & Wang, Stephanie W., 2010. "Belief Updating in Sequential Games of Two-Sided Incomplete Information: An Experimental Study of a Crisis Bargaining Model," Quarterly Journal of Political Science, now publishers, vol. 5(3), pages 243-255, December.
    • Handle: RePEc:now:jlqjps:100.00010012
    DOI: 10.1561/100.00010012
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    Cited by:

    1. Maoliang Ye & Jie Zheng & Plamen Nikolov & Sam Asher, 2020. "One Step at a Time: Does Gradualism Build Coordination?," Management Science, INFORMS, vol. 66(1), pages 113-129, January.
    2. Marco Serena, 2019. "A Game-Free Microfoundation of Mutual Optimism," Games, MDPI, vol. 10(4), pages 1-14, September.
    3. Kriss, Peter H. & Nagel, Rosemarie & Weber, Roberto A., 2013. "Implicit vs. explicit deception in ultimatum games with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 337-346.

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