COMMITMENT VERSUS DISCRETION IN THE PEASANT-DICTATOR GAME

We report an experiment designed to test the influence of commitment v ersus discretion in a simple bargaining game. Game theory predicts and the public policy literature emphasizes that the ability to make comm itments promotes efficiency. We find that commitment does significantl y increase efficiency in the experiment. Finally, we relate our findin gs to the extant literature on extensive form bargaining experiments b y examining fairness and trust as explanations for some observed anoma lies. (C) 1995 Academic Press, Inc.