1 Markets, Games, and Strategic Behavior: Recipes for Interactive Learning Charles A. Holt...

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1 Markets, Games, and Strategic Behavior: Recipes for Interactive Learning Charles A. Holt University of Virginia Comments welcome:  XXXXXXXXXX January 2005 This draft includes new chapters on Extensive-Form Games, Monopoly/Cournot, Market Institutions and Power, Collusion, Lemons Markets, Asset Markets and Bubbles, Multi-Unit Auctions, Trust and Reciprocity, and Common Pool Resources. The book is organized so that one can cover the first 5 chapters and then skip around to particular topics of special interest. Each chapter is designed to be a reading assignment for a single class, and each chapter is matched with one or more suggested experiments, either run on the Veconlab website or by hand, with instructions provided in the appendices.

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Take-it-or-leave-it
The Bargaining Problem in economics is a situation where there are opportunities of gains from trade. The question is then how to distribute the gains from trade. “Take-it-or-leave-it” is the simplest form of sequential move bargaining game between two players where each player makes one move.  There are several instances when the transaction (economic) involve a final offer a final offer from one person to another, where rejection means zero earnings on the transaction for both. Examples include a seller and a buyer bargaining over the price of a house, a movie star and a studio bargaining over the star price. In such a scenario if the movie star and studio fail to reach an agreement over the price terms, then the movie star doesn’t get the assignment and the studio doesn’t get the movie star.

1 Markets, Games, and Strategic Behavior: Recipes for Interactive Learning Charles A. Holt University of Virginia Comments welcome: XXXXXXXXXX January 2005 This draft includes new chapters on...

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