Is there as-if bargaining?

Abstract

“As-if bargaining” claims that ultimatum demands and demands in the Nash demand game are analogously derived and are therefore similar to each other. By comparing experimentally the ultimatum and the Nash demand game with varying conflict payoffs we try to assess the empirical validity of this hypothesis. In addition, we test how the implicit power assessments of the participants depend on their conflict payoffs. Both, average proposer demands and marginal reactions to changing conflict payoffs differ significantly between the two games. Nevertheless a minority of subjects plays game-invariantly, as postulated by as-if bargaining. Strikingly, the frequently used generalized Nash bargaining solution neither accounts for ultimatum nor for Nash demand behavior.