Experimental Economics

, Volume 7, Issue 1, pp 25–48 | Cite as

Timing and Virtual Observability in Ultimatum Bargaining and “Weak Link” Coordination Games

Article

Abstract

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.

timing coordination games experiments 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 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.Google Scholar
  2. 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.Google Scholar
  3. Bagai, J.S. (1992). Influencing Behavior in Ultimatum Bargaining. University of Pennsylvania.Google Scholar
  4. Bagwell, K. (1995). “Commitment and Observability in Games.” Games and Economic Behavior. 8, 271–280.Google Scholar
  5. Blount, S. (1995). “When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences.” Organizational Behavior and Human Decision Processes. 62(2), 131–144.Google Scholar
  6. Blount, S. and Bazerman, M. (1996). “The Inconsistent Evaluation of Absolute Versus Comparative Payoffs in Labor Supply and Bargaining.” Journal of Economic Behavior and Organization. 30, 227–240.Google Scholar
  7. 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.Google Scholar
  8. Bryant, J. (1983). “A Simple Rational Expectations Keynes-Type Model.” Quarterly Journal of Economics. 97, 525–529.Google Scholar
  9. Budescu, D.V., Au, W.T., and Chen, X.-P. (1997). “Effects of Protocol of Play and Social Orientation on Behavior in Sequential Resource Dilemmas.” Organizational Behavior & Human Decision Processes. 69(3), 179–193.Google Scholar
  10. Camerer, C.F. and Karjalainen, R. (1994). “Ambiguity-Aversion and Non-Additive Beliefs in Non-Cooperative Games: Experimental Evidence.” In B. Munier and M. Machina (eds.), Models and Experiments on Risk and Rationality. Dordrecht: Kluwer Academic Publishers, pp. 325–358.Google Scholar
  11. Camerer, C.F. and Knez, M. (1997). “Coordination in Organizations: A Game-Theoretic Perspective.” In Zur Shapira (ed.), Organizational Decision Making. Cambridge: Cambridge Series on Judgment and Decision Making.Google Scholar
  12. Camerer, C.F. and Thaler, R. (1995). “Anomalies: Dictators, Ultimatums, and Manners.” Journal of Economic Perspectives. 9(Spring), 209–219.Google Scholar
  13. Cooper, R., DeJong, D., Forsythe, R., and Ross, T. (1993). “Forward Induction in the Battle-of-the-Sexes Games.” The American Economic Review. 83, 1303–1316Google Scholar
  14. Güth, W., Huck, S., and 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(2), 313–325.Google Scholar
  15. Ho, T.-H., Camerer, C., and Weigelt, K. (1998). “Iterated Dominance and Iterated Best-Response in Experimental ‘p-Beauty Contests.’” American Economic Review. 88, 947–969.Google Scholar
  16. Huck, S. and Muller, W. (2000). “Perfect Versus Imperfect Observability—An Experimental Test of Bagwell's Result.” Games and Economic Behavior. 31, 174–190.Google Scholar
  17. Kreps, D.M. (1990). Game Theory and Economic Modelling. Oxford: Oxford University Press.Google Scholar
  18. Miller, D.T. and Gunasegram, S. (1990). “Temporal Order and the Mutability of Events: Implications for Blame Assignment.” Journal of Personality and Social Psychology. 59, 1111–1119.Google Scholar
  19. Mitchell, D., Russo, J., and Pennington, N. (1989). “Back to the Future: Temporal Perspective in the Explanation of Events.” Journal of Behavioral Decision Making. 2, 1–23.Google Scholar
  20. Morris, M.W., Sim, D., and 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, 494–512.Google Scholar
  21. Muller, R.A. and Sadanand, A. (1998). “Virtual Observability in Two Person Games.” Unpublished manuscript.Google Scholar
  22. Rabin, M. (1993). “Incorporating Fairness into Game Theory and Economics.” American Economic Review. 83, 1281–1302.Google Scholar
  23. Rapoport, A. (1997). “Order of Play in Strategically Equivalent Games in Extensive Form.” International Journal of Game Theory. 26(1), 113–136.Google Scholar
  24. Rapoport, A., Budescu, D., and Suleiman, R. (1993). “Sequential Requests from Randomly Distributed Shared Resources.” Journal of Mathematical Psychology. 37, 241–265.Google Scholar
  25. Ross, L. and Samuels, S. (1993). The Predictive Power of Personal Reputation versus Labels and Construal in the Prisoner's Dilemma Game. Stanford, California: Stanford University.Google Scholar
  26. Schelling, T. (1960). The Strategy of Conflict. Cambridge, MA: Harvard University Press.Google Scholar
  27. Van Huyck, J.B., Battalio, R.B., and Beil, R.O. (1990). “Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure.” American Economic Review. 80(1), 234–248.Google Scholar
  28. Von Neumann and Morgenstern. (1947). The Theory of Games and Economic Behavior. 2nd ed. Princeton: Princeton University Press.Google Scholar
  29. Weber, R.A. (2001). “Learning and Behavior in the ‘Dirty Faces' Game.”’ Experimental Economics. 4(3), 229–242.Google Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Roberto A. Weber
    • 1
  • Colin F. Camerer
    • 2
  • Marc Knez
    • 3
  1. 1.Department of Social and Decision SciencesCarnegie Mellon UniversityPittsburghUSA
  2. 2.Division of Social Sciences 228-77California Institute of TechnologyPasadenaUSA
  3. 3.Lexecon Strategy GroupChicagoUSA

Personalised recommendations