Timing and Virtual Observability in Ultimatum Bargaining and “Weak Link” Coordination Games
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.Get Access
Previous studies have shown that simply knowing one player moves first can affect behavior in games, even when the first-mover's moves are known to be unobservable. This observation violates the game-theoretic principle that timing of unobserved moves is irrelevant, but is consistent with virtual observability, a theory of how timing can matter without the ability to observe actions. However, this previous research only shows that timing matters in games where knowledge that one player moved first can help select that player's preferred equilibrium, presenting an alternative explanation to virtual observability. We extend this work by varying timing of unobservable moves in ultimatum bargaining games and “weak link” coordination games. In the latter, the equilibrium selection explanation does not predict any change in behavior due to timing differences. We find that timing without observability affects behavior in both games, but not substantially.
- Abele, S., Bless, H., and Ehrhart, K.-M. (in press). “Social Information Processing in Strategic Decision Making: Why Timing Matters.” Organizational Behavior and Human Decision Processes.
- Amershi, A., Sadanand, A., and Sadanand, V. (1989). “Manipulated Nash Equilibria I: Forward Induction and Thought Process Dynamics in Extensive Form.” Discussion Paper 1989-4, University of Minnesota.
- Bagai, J.S. (1992). Influencing Behavior in Ultimatum Bargaining. University of Pennsylvania.
- Bagwell, K. (1995) Commitment and Observability in Games. Games and Economic Behavior 8: pp. 271-280
- Blount, S. (1995) When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences. Organizational Behavior and Human Decision Processes 62: pp. 131-144
- Blount, S., Bazerman, M. (1996) The Inconsistent Evaluation of Absolute Versus Comparative Payoffs in Labor Supply and Bargaining. Journal of Economic Behavior and Organization 30: pp. 227-240
- Boles, T.M. and Messick, D.M. “Accepting Unfairness: Temporal Influence on Choice.” In K. Borcherding, O.I. Laricher, and D.M. Messick (eds.), Contemporary Issues in Decision Making. Amsterdam: North-Holland, pp. 375–389.
- Bryant, J. (1983) A Simple Rational Expectations Keynes-Type Model. Quarterly Journal of Economics 97: pp. 525-529
- Budescu, D.V., Au, W.T., Chen, X.-P. (1997) Effects of Protocol of Play and Social Orientation on Behavior in Sequential Resource Dilemmas. Organizational Behavior & Human Decision Processes 69: pp. 179-193
- Camerer, C.F., Karjalainen, R. Ambiguity-Aversion and Non-Additive Beliefs in Non-Cooperative Games: Experimental Evidence. In: Munier, B., Machina, M. eds. (1994) Models and Experiments on Risk and Rationality. Kluwer Academic Publishers, Dordrecht, pp. 325-358
- Camerer, C.F., Knez, M. Coordination in Organizations: A Game-Theoretic Perspective. In: Shapira, Z. eds. (1997) Organizational Decision Making. Cambridge Series on Judgment and Decision Making, Cambridge
- Camerer, C.F., Thaler, R. (1995) Anomalies: Dictators, Ultimatums, and Manners. Journal of Economic Perspectives 9: pp. 209-219
- Cooper, R., DeJong, D., Forsythe, R., Ross, T. (1993) Forward Induction in the Battle-of-the-Sexes Games. The American Economic Review 83: pp. 1303-1316
- Güth, W., Huck, S., Rapoport, A. (1998) The Limits of the Positional Order Effect: Can it Support Silent Threats and Non-Equilibrium Behavior. Journal of Economic Behavior and Organization 34: pp. 313-325
- Ho, T.-H., Camerer, C., Weigelt, K. (1998) Iterated Dominance and Iterated Best-Response in Experimental ‘p-Beauty Contests.’. American Economic Review 88: pp. 947-969
- Huck, S., Muller, W. (2000) Perfect Versus Imperfect Observability—An Experimental Test of Bagwell's Result. Games and Economic Behavior 31: pp. 174-190
- Kreps, D.M. (1990) Game Theory and Economic Modelling. Oxford University Press, Oxford
- Miller, D.T., Gunasegram, S. (1990) Temporal Order and the Mutability of Events: Implications for Blame Assignment. Journal of Personality and Social Psychology 59: pp. 1111-1119
- Mitchell, D., Russo, J., Pennington, N. (1989) Back to the Future: Temporal Perspective in the Explanation of Events. Journal of Behavioral Decision Making 2: pp. 1-23
- Morris, M.W., Sim, D., Girotto, V. (1998) Distinguishing Sources of Cooperation in the One-Round Prisoner's Dilemma: Evidence for Cooperative Decisions Based on Illusions of Control. Journal of Experimental Social Psychology 34: pp. 494-512
- Muller, R.A. and Sadanand, A. (1998). “Virtual Observability in Two Person Games.” Unpublished manuscript.
- Rabin, M. (1993) Incorporating Fairness into Game Theory and Economics. American Economic Review 83: pp. 1281-1302
- Rapoport, A. (1997) Order of Play in Strategically Equivalent Games in Extensive Form. International Journal of Game Theory 26: pp. 113-136
- Rapoport, A., Budescu, D., Suleiman, R. (1993) Sequential Requests from Randomly Distributed Shared Resources. Journal of Mathematical Psychology 37: pp. 241-265
- Ross, L., Samuels, S. (1993) The Predictive Power of Personal Reputation versus Labels and Construal in the Prisoner's Dilemma Game. Stanford University, Stanford, California
- Schelling, T. (1960) The Strategy of Conflict. Harvard University Press, Cambridge, MA
- Van Huyck, J.B., Battalio, R.B., Beil, R.O. (1990) Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure. American Economic Review 80: pp. 234-248
- Von Neumann, , Morgenstern, (1947) The Theory of Games and Economic Behavior. Princeton University Press, Princeton
- Weber, R.A. (2001) Learning and Behavior in the ‘Dirty Faces' Game’. Experimental Economics 4: pp. 229-242
- Timing and Virtual Observability in Ultimatum Bargaining and “Weak Link” Coordination Games
Volume 7, Issue 1 , pp 25-48
- Cover Date
- Print ISSN
- Online ISSN
- Kluwer Academic Publishers
- Additional Links
- coordination games
- Industry Sectors
- Author Affiliations
- 1. Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA, 15213, USA
- 2. Division of Social Sciences 228-77, California Institute of Technology, Pasadena, CA, 91125, USA
- 3. Lexecon Strategy Group, Chicago, Illinois, 60604, USA