ESRC Centre for Economic Learning and Social Evolution
Abstract
This paper offers an experimental test of a version
of Rubinstein’s bargaining model in which the players’ discount
factors are unequal. We find that learning, rationality, and fairness
are all significant in determining the outcome. In particular,
we find that a model of myopic optimization over time predicts
the sign of deviations in the opening proposal from the final
undiscounted agreement in the previous period rather well. To
explain the amplitude of the deviations, we then successfully fit
a perturbed version of the model of myopic adjustment to the
data that allows for a bias toward refusing inequitable offers
