Gale, J. and Binmore, K.G. and Samuelson, L. (1995) Learning to be imperfect: the ultimatum game. Games and Economic Behavior , 8 (1) pp. 56-90. 10.1016/S0899-8256(05)80017-X.
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This paper studies interactive learning processes that are subject to constant perturbations or “noise.” We argue that payoffs in the Ultimatum Game are such that responders are more apt to be “noisy” than are proposers and show that as a result the learning process readily leads to outcomes that are Nash equilibria but not subgame-perfect. We conclude that game theorists should not restrict attention to the subgame-perfect equilibrium when predicting laboratory behavior in the Ultimatum Game.
|Title:||Learning to be imperfect: the ultimatum game|
|UCL classification:||UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics|
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