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Title:Escalation bargaining: Theoretical analysis and experimental test PDF Logo
Authors:Chuah, Swee-Hoon
Hoffmann, Robert
Larner, Jeremy
Issue Date:2011
Series/Report no.:CeDEx discussion paper series 2011-05
Abstract:The standard chicken game is a popular model of certain important real scenarios but does not allow for the escalation behaviour these are typically associated with. This is problematic if the critical, final decisions in these scenarios are sensitive to previous escalation. We introduce and analyse, theoretically and by experiment, a new game which permits escalation behaviour. Compared with an equivalent chicken game, Pareto-suboptimal outcomes are significantly more frequent. This result is inconsistent with our rational choice analysis and possible psychological roots are explored.
Subjects:escalation
brinkmanship
chicken game
experiments
JEL:C72
C78
C91
Document Type:Working Paper
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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