Conventional contracts, intentional behavior and logit choice: Equality without symmetry

When coordination games are played under the logit choice rule and there is intentional bias in agents' non-best response behavior, we show that the Egalitarian bargaining solution emerges as the long run social norm. Without intentional bias, a new solution, the Logit bargaining solution emerg...

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Bibliographic Details
Published in:Games and economic behavior 2018-07, Vol.110, p.273-294
Main Authors: Hwang, Sung-Ha, Lim, Wooyoung, Neary, Philip, Newton, Jonathan
Format: Article
Language:English
Subjects:
Egalitarianism
Evolution
Logit choice
Nash program
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Summary:When coordination games are played under the logit choice rule and there is intentional bias in agents' non-best response behavior, we show that the Egalitarian bargaining solution emerges as the long run social norm. Without intentional bias, a new solution, the Logit bargaining solution emerges as the long run norm. These results contrast with results under non-payoff dependent deviations from best response behavior, where it has previously been shown that the Kalai–Smorodinsky and Nash bargaining solutions emerge as long run norms. We complement the theory with experiments on human subjects, results of which suggest that non-best response play is payoff dependent and displays intentional bias. This suggests the Egalitarian solution as the most likely candidate for a long run bargaining norm.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2018.05.002