Demand commitment bargaining in three-person quota game experiments

Abstract

The paper reports results of experiments on three-person quota games without the grand coalition and with zero values for the one-person coalitions. The experimental procedure used is the demand commitment model. This model generates finite extensive games with perfect information whose neutral equilibrium point predicts quota agreements. The termneutral means that at every decision point all locally optimal choices are taken with equal probability. Quota agreements do not perform better than equal division payoff bounds, but nevertheless the experiments show that quotas have some behavioral relevance. The demand commitment model seems to favor learning of the quota concept if subjects have the opportunity to gain experience by frequently playing the same game.