Learning in the WTO/DDA negotiations?: an experimental study

The purpose of this paper is to identify learning in games in experimental economic settings, and apply their results to real multilateral trade negotiations, such as the Doha Development Agenda (DDA) in the World Trade Organizations (WTO). This paper argues that the structure of games including a veto player (Veto games) is similar to the WTO/DDA negotiations in that the players do not possess identical power. This paper’s main contribution to the literature involves showing that learning about power is dominant over learning from simple repetition in Veto games. Additionally, this paper shows that players are concerned about how much they have gained in previous games in Veto games, although their memories generally do not last beyond the next game, and thus they tend to be selfish as they have less shares. Based on these results, there is a possibility to be more generous in the distribution of benefits by allowing players without veto power to retain special rights so that they would not be totally powerless. It also shows the necessity of having “respite” in the process of negotiations and policy options for choosing partners for winning coalitions.