More Money or More Certainty? Uncertainty in Alternating Pie-Sharing Experiments

50 Pages Posted: 2 Dec 2020

See all articles by Anna Conte

Anna Conte

University of Rome I - Department of Statistical Sciences

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Paul Pezanis-Christou

U. of Adelaide School of Economics

Date Written: October 2020

Abstract

We experimentally study a class of pie-sharing games with alternating roles in which the second (and final) stage of interaction follows the rules of a private impunity game, and occurs with a certain probability only if a first-stage agreement is not reached. A large number of participants play various games with known second-stage pie size and probability. We try to account for systematic behaviour econometrically, and interpret our findings from a choice-under-strategic-uncertainty perspective. The analysis reveals a remarkable similarity of behaviour across roles and shows not only that individuals seem to evaluate both stages simultaneously, but also that the probability of reaching an agreement is largely in influenced by strategic uncertainty.

Keywords: game theory, alternating-offer bargaining, impunity, probability distortion, risk, strategic uncertainty

JEL Classification: C33, C34, C78, C91, D80

Suggested Citation

Conte, Anna and Güth, Werner and Pezanis-Christou, Paul, More Money or More Certainty? Uncertainty in Alternating Pie-Sharing Experiments (October 2020). Available at SSRN: https://ssrn.com/abstract=3714040 or http://dx.doi.org/10.2139/ssrn.3714040

Anna Conte (Contact Author)

University of Rome I - Department of Statistical Sciences ( email )

Piazzale Aldo Moro 5
Rome, 00185
Italy

HOME PAGE: http://https://www.dss.uniroma1.it/it/dipartimento/persone/conte-anna

Werner Güth

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Paul Pezanis-Christou

U. of Adelaide School of Economics

Adelaide
Australia

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