10. Understanding Negotiations: A Video Approach in Experimental Gaming

Personal communication with Heike Hennig-Schmidt

Concepts of bounded rationality were not of equal importance to experimental economists in the US. See Roth (1995) who states: “Interestingly the aspiration hypothesis has attracted different amounts of attention on different sides of the ocean. American experimenters and theorists have subsequently come to regard aspirations as, at most, an intermediate variable, rather than as a primary explanatory variable. Our German counterparts have been more inclined to regard aspirations as a primary explanatory variable (p. 88, Fn. 28).

Austin Hoggatt had built up the first computerized laboratory for experimental economics at the University of California in Berkeley several years before.

In addition to papers and publications reported in this essay, see e.g. Artale (1996), Jacobsen and Sadrieh (1996), Rockenbach et al. (2007).

Selten and Leopold-Wildburger (1982a, b), Becker et al. (2007).

See Potter (1996) for several arguments of this paragraph.

See e.g. Burton et al. (2000), Bosman and van Winden (2002), Bosman et al. (2006).

See e.g. Charness and Dufwenberg (2006), Cooper and Kagel (2005), Gächter and Riedl (2005).

In cross-cultural experiments, behavior in two or more cultures is compared with no direct interaction of subjects belonging to different cultures; inter-cultural experiments investigate behavior of subjects in different cultures interacting directly with each other. In intra-cultural experiments, participants from one country/culture interact with each other. See Walkowitz et al. (2009).

See Bornstein and Yaniv (1998) and Robert and Carnevale (1997), focusing on an ultimatum game; Bornstein et al. (2004), using the centipede game; Bornstein et al. (2008), analyzing a Bertrand duopoly; and Cooper and Kagel (2005) studying a signalling game.

For example, Cason and Mui (1998) find that groups are more generous in a dictator game, while Cox and Hayne (2006), analyzing common value auctions, and Kocher and Sutter (2007), focusing on gift exchange, report some mixed evidence.

See Raab and Schipper (2009), examining Cournot competition, and Bosman et al. (2006) analyzing a power-to-take game.

Group payoffs were equally divided among the group members, or proportional to E_i in the few cases where these individually earned incomes differed.

The summer schools were supported by the Sino-German Center for Research Promotion, Beijing.

Reinhard Selten: “Lectures on Bounded Rationality”, University of Bonn, winter term 1995/1996.

See also Hennig-Schmidt (1999).

The same is true for AOBe, see Hennig-Schmidt and Yi (2009).

See also Hennig-Schmidt (1999).

Exceptions are the Equal Split of the difference between proposals/aspiration levels of bargainers.

Hennig-Schmidt and Geng (2006) investigate the impact of fairness on behavior in PTT using the transcripts of Bosman et al. (2006). Here, fairness-oriented take authorities claim lower take rates than groups without such a concern. Their payoffs, nevertheless, are higher, as are the payoffs of the corresponding responder groups as the latter had no incentive to destroy.

Hennig-Schmidt and Geng (2005) also use the transcripts of Bosman et al. (2006).

Again content analysis and a hierarchical coding procedure is used. Two raters in a first step coded the transcripts for Own and Counterpart’s perspective. In a second step they coded for Levels of Reasoning.

Parentheses [..] are inserted to facilitate understanding the complicated thought process.

The transcripts were content analyzed for emotion words like anger, rage, sadness, defiance, revenge, pain.

See Walkowitz et al. (2009) for an extensive description of the organizational and procedural steps in an inter-cultural experiment.

We used the same coding system and procedure as in Germany, see section “Aspiration Levels and Equity”.

The transcripts were first auto-coded by ATLAS.ti for Chinese subjects mentioning the words (不)公平 (bu) gong ping, (不)合理 (bu) he li, (不)平等 (bu) ping deng, as equivalents for (un)fair, (un)just (in German “gerecht, fair”) in all word combinations. Then the same coding system and procedure as in Germany was applied, see section “Fairness and Equity”.

The coding system was designed to capture the motivations for rejecting advantageous offers.

“An average sentence, in a German newspaper, is a sublime and impressive curiosity; it occupies a quarter of a column; […]; it is built mainly of compound words constructed by the writer on the spot, and not to be found in any dictionary – six or seven words compacted into one, without joint or seam – that is, without hyphens; it treats of fourteen or fifteen different subjects, each enclosed in a parenthesis of its own, with here and there extra parentheses, which re-enclose three or four of the minor parentheses, making pens with pens; finally, all the parentheses and re-parentheses are massed together between a couple of king-parentheses, one of which is placed in the first line of the majestic sentence and the other in the middle of the last line of it – after which comes the verb, and you find out for the first time what the man has been talking about; and after the verb – merely by way of ornament, as far as I can make out, – the writer shovels in “haben sind gewesen gehabt haben geworden sein,” or words to that effect, and the monument is finished” (Mark Twain 1880/2010, 11).

Universität Bonn (2009), own translation from German.