This volume brings together all of Ken Binmore's influential experimental papers on bargaining along with newly written commentary in which Binmore discusses the underlying game theory and addresses the criticism leveled at it by behavioral economists. When Binmore began his experimental work in the 1980s, conventional wisdom held that game theory would not work in the laboratory, but Binmore and other pioneers established that game theory can often predict the behavior of experienced players very well in favorable laboratory settings. The case of human bargaining behavior is particularly challenging for game theory. Everyone agrees that human behavior in real-life bargaining situations is governed at least partly by considerations of fairness, but what happens in a laboratory when such fairness considerations supposedly conflict with game-theoretic predictions? Behavioral economists, who emphasize the importance of other-regarding or social preferences, sometimes argue that their findings threaten traditional game theory. Binmore disputes both their interpretations of their findings and their claims about what game theorists think it reasonable to predict. Binmore's findings from two decades of game theory experiments have made a lasting contribution to economics. These papers--some coauthored with other leading economists, including Larry Samuelson, Avner Shaked, and John Sutton--show that game theory does indeed work in favorable laboratory environments, even in the challenging case of bargaining. Table Of Contents Series Foreword vii Introduction 1 1 Getting to Equilibrium? 23 "Does Minimax Work? An Experimental Study" Joe Swierzbinski and Chris Proulx 27 2 Which Equilibrium? 63 "Focal Points and Bargaining" Joe Swierzbinski, Steven Hsu and Chris Proulx 67 3 The Ultimatum Game 103 "Testing Noncooperative Bargaining Theory: A Preliminary Study" Avner Shaked and John Sutton 113 4 Inequity Aversion? 119 "A Backward Induction Experiment" John McCarthy, Giovanni Ponti, Larry Samuelson and Avner Shaked 123 5 Outside Options 165 "An Outside Option Experiment" Avner Shaked and John Sutton 171 6 Forced Breakdown 189 "Do People Exploit Their Bargaining Power? An Experimental Study" Peter Morgan, Avner Shaked and John Sutton 193 7 Lost Opportunities 223 "Hard Bargains and Lost Opportunities" Chris Proulx, Larry Samuelson and Joe Swierzbinski 227 8 Unequal Bargaining Power 251 "A Little Behavioralism Can Go a Long Way" Joe Swierzbinski 257 Appendix A: More Ultimata 277 "Fairness or Gamesmanship in Bargaining: An Experimental Study" John Sutton and Avner Shaked 279 Appendix B: Backward Induction? 303 "A Note on Backward Induction" 305 "Rationality and Backward Induction" 309 Appendix C: Equilibrium Selection in the Ultimatum Game 331 "Learning to be Imperfect: The Ultimatum Game" John Gale and Larry Samuelson 333 Appendix D: Generalizing Rubinstein 369 "Bargaining Theory without Tears" 371 Notes to Chapter Introductory Remarks and Reprint Acknowledgments 391 Bibliography for Chapter Introductory Remarks 395 Index