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Gambler’s fallacy and imperfect best response in legislative bargaining
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SYSNO ASEP 0472317 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Článek ve WOS Title Gambler’s fallacy and imperfect best response in legislative bargaining Author(s) Nunnari, S. (IT)
Zápal, Jan (NHU-N)Source Title Games and Economic Behavior. - : Elsevier - ISSN 0899-8256
Roč. 99, September (2016), s. 275-294Number of pages 20 s. Language eng - English Country US - United States Keywords legislative bargaining ; experiments ; quantal response Subject RIV AH - Economics Institutional support NHU-N - RVO:67985998 UT WOS 000386194300019 EID SCOPUS 84992093316 DOI 10.1016/j.geb.2016.06.008 Annotation We investigate the implications of imperfect best response—in combination with different assumptions about correct (QRE) or incorrect beliefs (Quantal-Gambler's Fallacy or QGF)—in the alternating offer multilateral bargaining game. We prove that a QRE of this game exists and characterize the unique solution to the proposer's problem—that is, the proposal observed most frequently in a QRE. We structurally estimate this model on data from laboratory experiments, and show that it explains behavior better than the model with perfect best response: receivers vote probabilistically; proposers allocate resources mostly within a minimum winning coalition of legislators but do not fully exploit their bargaining power. Incorporating history-dependent beliefs about the future distribution of proposal power into the QRE model (QGF) leads to an even better match with the data, as this model implies slightly lower shares to the proposer, maintaining similar or higher frequencies of minimum winning coalitions and similar voting behavior. Workplace Economics Institute Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2017
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