Effect of monitor-subject cheap talk on ultimatum game offers

Jayson L. Lusk, Darren Hudson

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

We explore the influence of experimental monitor cheap talk on offers in single-shot ultimatum bargaining games. We find that behavior more closely resembles Nash equilibrium predictions when subjects are provided information about the theoretical money maximizing solution in addition to information about why behavior may deviate from this equilibrium. Among other things, results suggest subjects fail to behave consistently with the Nash equilibrium prediction because of a lack of knowledge of the theoretical money maximizing solution or because of a lack of common expectations about the rationality and beliefs of other players.

Original languageEnglish
Pages (from-to)439-443
Number of pages5
JournalJournal of Economic Behavior and Organization
Volume54
Issue number3
DOIs
StatePublished - Jul 2004

Keywords

  • Bounded rationality
  • Cheap talk
  • Experimental methods
  • Ultimatum games

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