Professor Nejat Anbarci nejat.anbarci@durham.ac.uk
Professor
A recurring puzzle in bargaining experiments is that individuals under-exploit their bargaining position, compared to theoretical predictions. We conduct an experiment using two institutions: Nash demand game (NDG) and unstructured bargaining game (UBG). Unlike most previous experiments, disagreement payoffs are earned rather than assigned, and about one-fourth of the time, one bargainer's disagreement payoff is more than half the cake size (“dominant bargaining power”), so that equal splits are not individually rational. Subjects under-respond to their bargaining position most severely in the NDG without dominant bargaining power. Responsiveness increases in the UBG, but is still lower than predicted; the same is true for the NDG with dominant bargaining power. Only in the UBG with dominant bargaining power – the combination of a bargaining institution with low strategic uncertainty and elimination of the 50–50 “security blanket” – do subjects approximately fully exploit their bargaining position.
Journal Article Type | Article |
---|---|
Acceptance Date | Nov 23, 2017 |
Online Publication Date | Nov 29, 2017 |
Publication Date | Jan 31, 2018 |
Deposit Date | Aug 16, 2018 |
Publicly Available Date | May 29, 2019 |
Journal | Journal of Economic Behavior and Organization |
Print ISSN | 0167-2681 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 145 |
Pages | 320-334 |
DOI | https://doi.org/10.1016/j.jebo.2017.11.020 |
Public URL | https://durham-repository.worktribe.com/output/1317228 |
Accepted Journal Article
(394 Kb)
PDF
Publisher Licence URL
http://creativecommons.org/licenses/by-nc-nd/4.0/
Copyright Statement
© 2018 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
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