Test of The Bargaining Set and Kernel Models in Three-Person Games

Abstract

Twelve groups of undergraduate subjects participated in computer-controlled experiments designed to test the bargaining set and kernel models for n-person games in characteristic function form. Each group played four iterations each of 5 three-person games in which v(A) = v(B) = v(C) = v(ABC) = 0, and v(AB) > v(AC) > v(BC) > 0. The effects of (i) the communication rules governing the negotiations, (ii) the differences among the payoffs assigned to each coalition, and (iii) learning were systematically investigated.The results are analyzed in terms of the frequencies of different coalition types that were formed, the disbursements of the payoffs, and the characterization of the bargaining process. They show the predominance of coalition AB, support the bargaining set and kernel models as predictors of final outcomes, reveal significant effects due to the latter two independent variables but not the former, and provide useful information about the nature of the bargaining process.KeywordsCoalition FormationCoalition StructureWinning CoalitionBargaining ProcessKernel ModelThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.