This article reports on an experiment that was designed to test predictions about the frequency of disagreement (strikes) in games with complete information. An empirical test of the "joint-cost" theory, which relates strike activity to the marginal cost of striking, is based on a set of "shrinking pie" games in which subjects bargained in consecutive periods over how to divide a sum of money. Strike activity was a frequent occurrence in these games and, moreover, did not disappear over time. The joint-cost theory received some support, indicating that further tests may be useful.

We study two-player pie-splitting games in which one player knows the pie and the other knows only its probability distribution. We compare treatments in which incentive-efficient strikes (disagreements) are possible with alternatives in which efficiency forbids strikes. We find that incentive-efficiency is very helpful in explaining when strikes occur. There is also evidence of substantial heterogeneity in the subjects' altruism and in their risk preferences. This means that the common-knowledge assumptions of game theory cannot be controlled in experiments; but in our experiments the main theoretical conclusions seem robust to violations of these assumptions.

We investigate the creation and evolution of conventions of behavior in “intergenerational games” or games in which a sequence of nonoverlapping “generations” of players play a stage game for a finite number of periods and are then replaced by other agents who continue the game in their role for an identical length of time. Players in generation t can offer advice to their successors in generation $t+1.$ What we find is that word‐of‐mouth social learning (in the form of advice from laboratory “parents” to laboratory “children”) can be a strong force in the creation of social conventions.

The authors study two-player, pie-splitting games in which one player knows the pie and the other knows only its probability distribution. The authors compare treatments in which incentive-efficient strikes (disagreements) are possible with alternatives in which efficiency forbids strikes. They find that incentive-efficiency is very helpful in explaining when strikes occur. There is also evidence of substantial heterogeneity in the subjects' altruism and in their risk preferences. This means that the common-knowledge assumptions of game theory cannot be controlled in experiments; but in the authors' experiments the main theoretical conclusions seem robust to violations of these assumptions. Copyright 1991 by American Economic Association.