Understanding when agents are fairmen or gamesmen

Abstract

Experiments designed to test the predictions of noncooperative game theory about the way that surplus will be divided in alternating offer games with discounting have produced conflicting results. Neither the Stahl/Rubinstein division nor the alternative equal division are generally supported. The experiments reported here suggest a regularity in the data that is consistent with all the previous experiments: First players who have a great advantage in the sense that the Stahl/Rubinstein division would give them a large share of the initial pie demand more than half of the pie, but do not fully exploit their advantage. First players who are at a disadvantage demand equal divisions. Journal of Economic Literature Classification Numbers: C72, C91. © 1994 Academic Press. All rights reserved.