Breitmoser, Yves and Tan, Jonathan H.W. (2010): Generosity in bargaining: Fair or fear?

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Abstract
Are "generous" bargaining offers made out of fairness or in fear of rejection? We disentangle risk and social references by analyzing experimental behavior in three majority bargaining games: (1) a randomproposer game with infinite time horizon; 2) a one round proposer game with disagreement payoffs equal to the infinite horizon continuation payoffs; and, (3) a demand commitment game. Inequity aversion predicts very differently across these games, but risk aversion does not. Observed strategies violate neither stationarity nor truncation consistency. This allows us to use structural models of bargaining behavior to estimate the latent type shares of subjects with CES, inequity averse, and Prospect theoretic preferences. The Prospect theoretic, i.e. referencedependent, model of utility explains the observations far better than any mixture of alternative models.
Item Type:  MPRA Paper 

Original Title:  Generosity in bargaining: Fair or fear? 
Language:  English 
Keywords:  coalitional bargaining, noncooperative modeling, random utility model, quantal response equilibrium, laboratory experiment 
Subjects:  C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C78  Bargaining Theory ; Matching Theory D  Microeconomics > D7  Analysis of Collective DecisionMaking > D78  Positive Analysis of Policy Formulation and Implementation C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C72  Noncooperative Games 
Item ID:  27444 
Depositing User:  Yves Breitmoser 
Date Deposited:  15. Dec 2010 01:18 
Last Modified:  23. Aug 2015 17:44 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/27444 