BARGAINING IN UNCERTAIN ENVIRONMENTS - A SYSTEMATIC DISTORTION OF PERFECT EQUILIBRIUM DEMANDS

We present data supporting the notion that subjects distort monotonica lly subgame perfect equilibrium demands in two-person discount bargain ing games, where, in addition to the traditional offer counter-offer s equence of moves, a player who rejects an offer may either be forced o ut of the bargaining or be given the option to opt out. Subjects also exhibit behavioral adaptivity-learning from past demands in a search f or the highest acceptable demand. These results are consistent with pr evious experimental evidence for these types of games, but stand in sh arp contrast to those obtained in discount bargaining where side optio ns are not available. (C) 1996 Academic Press, Inc.