This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Microeconomics: Vol. 1 No. 1 (February 2009)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Micro - All Issues

AEJ: Micro Forthcoming Articles

The Compromise Game: Two-Sided Adverse Selection in the Laboratory

Article Citation

Carrillo, Juan D., and Thomas R. Palfrey. 2009. "The Compromise Game: Two-Sided Adverse Selection in the Laboratory." American Economic Journal: Microeconomics, 1(1): 151-81.

DOI: 10.1257/mic.1.1.151

Abstract

We analyze a game of two-sided private information where players have privately known "strengths" and can decide to fight or compromise. If either chooses to fight, the stronger player receives a high payoff and the weaker player receives a low payoff. If both choose to compromise, each player receives an intermediate payoff. The only equilibrium is for players to always fight. In our experiment, we observe frequent compromise, more fighting the lower the compromise payoff and less fighting by first than second movers. We explore several theories of cognitive limitations in an attempt to understand these anomalous findings. (JEL C91, D82)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (33.24 KB) | Link to Appendix (39.38 KB)

Authors

Carrillo, Juan D. (U Southern CA, Los Angeles)
Palfrey, Thomas R. (CA Institute of Technology)

JEL Classifications

C91: Design of Experiments: Laboratory, Individual
D82: Asymmetric and Private Information

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Microeconomics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Micro - All Issues

AEJ: Micro - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us