Binmore, K. and Swierzbinski, J. and Tomlinson, C. (2007) An experimental test of Rubinstein's bargaining model. (ELSE Working Papers 260). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
This paper offers an experimental test of a version of Rubinstein’s bargaining model in which the players’ discount factors are unequal. We find that learning, rationality, and fairness are all significant in determining the outcome. In particular, we find that a model of myopic optimization over time predicts the sign of deviations in the opening proposal from the final undiscounted agreement in the previous period rather well. To explain the amplitude of the deviations, we then successfully fit a perturbed version of the model of myopic adjustment to the data that allows for a bias toward refusing inequitable offers.
| Type: | Working / discussion paper |
|---|---|
| Title: | An experimental test of Rubinstein's bargaining model |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2007 |
| Language: | English |
| UCL classification: | UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics |
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