Timing and Virtual Observability in Ultimatum Bargaining and Weak Link Coordination Games

Abstract

Previous studies have shown that simply knowing some players move first can affect behavior in games, even when the first-movers' moves are unobservable. This observation violates the game-theoretic principle that timing of unobserved moves is irrelevant. We extend this work by varying timing of unobservable moves in ultimatum bargaining games and "weak link" coordination games. Timing without observability affects both bargaining and coordination, but only weakly. The results are consistent with theories that allow "virtual observability" of first-mover choices, rather than theories in which timing matters only because first-mover advantage is used as a principle of equilibrium selection.