Two impatient players bargain about the division of a pie under a standard bargaining protocol in discrete time with time-invariant recognition probabilities. Instantaneous utility is linear, but players discount the future by a constant factor. Before bargaining starts, a player can commit to a...

This paper studies the impact of incentives on worker self-selection in a controlled laboratory experiment. Subjects face the choice between a fixed and a variable payment scheme. Depending on the treatment, the variable payment is a piece rate, a tournament or a revenue-sharing scheme. We find...

This paper attempts to explain how and why seemingly contradictory beliefs co-exist in an optimizing individual''s mind in the long run. We set up a dynamic model of decision-making inwhich the individual.s mind is composed of a coordinating principal and two conflicting agents. We take into...

We show that synergies enhance bidding competition to such an extent that they are a curse rather than a blessing for the bidders; they may even induce serious bankruptcy problems.

We show that delaying acceptance decisions in the Ultimatum Game drastically increases acceptance rates of low offers. While in standard treatments without delay less than 20% of low offers are accepted, these numbers increase to around 65-75% as we delay the acceptance decisions by around 10...

This note reexamines the connection between the asymmetric Nash bargaining solution and the equilibria of strategic bargaining games. Several papers in the literature obtain the asymmetric Nash bargaining solution as the unique limit of subgame perfect equilibria in stationary strategies when...

In this paper we study the effect of information on the occurrence of intentional price wars on the equilibrium path. An episode of low prices is an intentional price war if it follows a period of high prices which was ended intentionally by one of the firms in the market (the price war leader)....

In this paper a selection theory for stochastic games is developed. The theory itself is based on the ideas of Harsanyi and Selton to select equilibria for games in standard form. We introduce several possible definitions for the stochastic tracing procedure, an extension of the linear tracing...

Under a k-approval scoring rule each agent attaches a score of one to his k most preferred alternatives and zero to the other alternatives. The rule assigns the set of alternatives with maximal score. Agents may extend preferences to sets in several ways: they may compare the worst alternatives,...

We introduce trustworthy traders in bilateral trading. Trustworthy traders do not misrepresent their private information. We prove that an increase in the levels of trust (probabilities that traders are trustworthy) can reduce the maximum attainable probability of trade among the strategic...