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Timing and Virtual Observability in Ultimatum Bargaining and “Weak Link” Coordination Games

Published online by Cambridge University Press:  14 March 2025

Roberto A. Weber*
Affiliation:
Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA 15213, USA
Colin F. Camerer*
Affiliation:
Division of Social Sciences 228-77, California Institute of Technology, Pasadena, CA 91125, USA
Marc Knez
Affiliation:
Lexecon Strategy Group, Chicago, Illinois 60604, USA

Abstract

Previous studies have shown that simply knowing one player moves first can affect behavior in games, even when the first-mover's moves are known to be unobservable. This observation violates the game-theoretic principle that timing of unobserved moves is irrelevant, but is consistent with virtual observability, a theory of how timing can matter without the ability to observe actions. However, this previous research only shows that timing matters in games where knowledge that one player moved first can help select that player's preferred equilibrium, presenting an alternative explanation to virtual observability. We extend this work by varying timing of unobservable moves in ultimatum bargaining games and “weak link” coordination games. In the latter, the equilibrium selection explanation does not predict any change in behavior due to timing differences. We find that timing without observability affects behavior in both games, but not substantially.

Type
Research Article
Copyright
Copyright © 2004 Economic Science Association

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Footnotes

*

Author to whom correspondence should be addressed.

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