Does Game Theory Work? the Bargaining Challenge

This volume brings together all of Ken Binmore's influential experimentalpapers on bargaining along with newly written commentary in which Binmore discussesthe underlying game theory and addresses the criticism leveled at it by behavioraleconomists.When Binmore began his experimental work in the 1980s, conventionalwisdom held that game theory would not work in the laborato

This volume brings together all of Ken Binmore's influential experimentalpapers on bargaining along with newly written commentary in which Binmore discussesthe underlying game theory and addresses the criticism leveled at it by behavioraleconomists.When Binmore began his experimental work in the 1980s, conventionalwisdom held that game theory would not work in the laboratory, but Binmore and otherpioneers established that game theory can often predict the behavior of experiencedplayers very well in favorable laboratory settings. The case of human bargainingbehavior is particularly challenging for game theory. Everyone agrees that humanbehavior in real-life bargaining situations is governed at least partly byconsiderations of fairness, but what happens in a laboratory when such fairnessconsiderations supposedly conflict with game-theoretic predictions? Behavioraleconomists, who emphasize the importance of other-regarding or social preferences, sometimes argue that their findings threaten traditional game theory. Binmoredisputes both their interpretations of their findings and their claims about whatgame theorists think it reasonable to predict.Binmore's findings from two decades ofgame theory experiments have made a lasting contribution to economics. Thesepapers--some coauthored with other leading economists, including Larry Samuelson, Avner Shaked, and John Sutton--show that game theory does indeed work in favorablelaboratory environments, even in the challenging case of bargaining.Does Game TheoryWork? The Bargaining Challenge, Volume 2