Do people make strategic commitments? Experimental evidence on strategic information avoidance

• Published in: Experimental economics : a journal of the Economic Science Association Vol. 13; no. 2; pp. 206 - 225
• Main Authors: Poulsen, Anders U, Roos, Michael W. M
• Format: Journal Article
• Language: English
• Published: Boston Boston : Springer US 01.06.2010; Springer US; Springer; Springer Nature B.V
• Series: Experimental Economics
• Subjects: Bargaining; Behavioral decision theory; Behavioral/Experimental Economics; C72; C78; C90; C92; Commitment; Commitments; D63; D80; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Endogenous timing; Experiment; Experiments; Game Theory; Hypotheses; Information economics; Microeconomics; Nash equilibrium; Operations Research/Decision Theory; Physical timing effects; Social and Behav. Sciences; Strategic commitment; Strategic value of information; Studies; Time; Timing issues; D63; C78; Experiment; Bargaining; Strategic value of information; Endogenous timing; Commitment; Physical timing effects; C90; Strategic commitment; C92; D80; C72
• ISSN: 1386-4157; 1573-6938
• DOI: 10.1007/s10683-010-9236-6

Game theory predicts that players make strategic commitments that may appear counter-intuitive. We conducted an experiment to see if people make a counter-intuitive but strategically optimal decision to avoid information. The experiment is based on a sequential Nash demand game in which a responding player can commit ahead of the game not to see what a proposing player demanded. Our data show that subjects do, but only after substantial time, learn to make the optimal strategic commitment. We find only weak evidence of physical timing effects.