An Experiment with Ultimatum Bargaining in a Changing Environment

Eyal Winter & Shmuel Zamir

We have obtained experimental results on the ultimatum bargaining game that support an evolutionary explanation for subjects' behavior in the game. In these experiments we have created enviornments in which subjects interact with each other in addition to interacting with virtual players, i.e. computer programs with pre-specified stategies. Some of these virtual players were designed to play the equitable allocation, while others exhibited behavior closer to the subgame-perfect equilibrium, in which the proposer's share is much larger than that of the responder. We have observed significant differences in the behavior of real subjects depending on the type of "mutants" (virtual players) that were present in their enviornment.

December, 1997
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Published in "Bargaining with an Agenda" Games and Economic Behavior 48 (2004), 139-153