The Degree of Information Exchange on the Effectiveness and Efficiency of Cooperation in the Bargaining Game

Abstract

This study extends the understanding of game theory on cooperative utility and efficiency. The paper investigated the literature of Rubinstein Model with perfect information in Game theory by adding authors knowledge and experiment of how the degree of information affect effectiveness and efficiency of cooperation. This research is based on previous experiment by designing a new experiment and collecting qualitative data. Allocative efficiency is further discussed in our strategic game setup. Types of motivation were also evaluated in the investigation, including intrinsic, extrinsic, and image motivation, to analyze the possible correlation between players strategic behaviors and motivation. Motivation can lead to interactive cooperative behavior, leading to either success or failure of achieving allocative efficiency. This paper also analyzed the reasons behind uncooperative behaviors. Based on the findings, the theory of the importance of incentive-based cooperative behavior in bargaining games has been developed.