Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5071291 | Games and Economic Behavior | 2017 | 48 Pages |
Abstract
We develop, and experimentally test, models of informal agreements. Agents are assumed to be honest but suffer costs of overcoming temptations. We extend two classical bargaining solutions - split-the-difference and deal-me-out - to this informal agreement setting. For each solution there are two natural ways to do this, leaving us with 2Ã2 models to explore. In the experiment, a temptations-constrained version of deal-me-out emerges as the clear winner.
Related Topics
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Authors
Martin Dufwenberg, MaroÅ¡ Servátka, Radovan VadoviÄ,