Authors: David A. Kravitz and Samuel J. Gunto

Title: Modeling coalition formation in inessential probabilistic games

Source: In R. Tietz, W. Albers, & R. Selten (Eds.), Lecture notes in economics and mathematical systems: No. 314. Bounded rational behavior in experimental games and markets (pp. 268-285). Berlin, West Germany: Springer. 1988.

Single-sex triads in one of two payment conditions played six different probabilistic coalition games under conditions of complete information and open negotiations. Coalitions formed on 96% of the trials and the stronger players generally accepted lower expected values in the coalitions than they would have had playing alone. These results are used to evaluate several normative and descriptive coalition theories. Equal excess model received stronger support than bargaining theory, and both were superior to equality. Relative support for the game-theoretic solution varied with the payment condition. The advantages of qualitative/directional theory tests over quantitative/point prediction tests are discussed and illustrated with these results. A possible parameter estimation/model testing approach is briefly discussed, and recommended for future consideration.

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