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Concession Behavior in a Bargaining Game

Author

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  • Barry Sopher

    (Rutgers University)

Abstract

This article reports on an experiment concerned with a two-stage, two-person, simultaneous-demand bargaining game. The focus of analysis is on a prediction for concession behavior in the second-stage game provided by Harsanyi's “risk dominance†principle, which is at odds with the prediction provided by the mixed-strategy equilibrium in the second-stage game. The results of the experiment provide support for the risk dominance prediction, with concessions occurring according to the prediction in 78% of eligible cases, thus outperforming the mixed-strategy equilibrium as a predictor of concession behavior.

Suggested Citation

  • Barry Sopher, 1994. "Concession Behavior in a Bargaining Game," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(1), pages 117-137, March.
    • Handle: RePEc:sae:jocore:v:38:y:1994:i:1:p:117-137
    DOI: 10.1177/0022002794038001006
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, April.
    3. Sopher, Barry, 1993. "A laboratory analysis of bargaining power in a random ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 21(1), pages 69-90, May.
    4. Ken Binmore & Avner Shared & John Sutton, 1989. "An Outside Option Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 753-770.
    5. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    6. Sopher, Barry, 1990. "Bargaining and the Joint-Cost Theory of Strikes: An Experimental Study," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 48-74, January.
    7. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    8. Gilboa, Itzhak & Schmeidler, David, 1988. "Information dependent games : Can common sense be common knowledge?," Economics Letters, Elsevier, vol. 27(3), pages 215-221.
    9. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-372, June.
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    Cited by:

    1. David Sally, 2002. "`What an Ugly Baby!'," Rationality and Society, , vol. 14(1), pages 78-108, February.
    2. Michael Filzmoser & Rudolf Vetschera, 2008. "A Classification of Bargaining Steps and their Impact on Negotiation Outcomes," Group Decision and Negotiation, Springer, vol. 17(5), pages 421-443, September.

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