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Reference point effects in legislative bargaining: experimental evidence

Author

Listed:
  • Nels Christiansen

    (Trinity University)

  • John H. Kagel

    (Ohio State University)

Abstract

Recent interest in reducing budget deficits raises questions regarding the impact on legislative bargaining of cuts versus increases in government spending. Using an experimental design where the outcomes are theoretically isomorphic results in significant differences in bargaining outcomes: There are longer delays in reaching agreement with cuts than with increases, along with which legislative types get their proposals passed. These results can be attributed to a change in agents’ reference point in conjunction with differential responses to gains versus losses.

Suggested Citation

  • Nels Christiansen & John H. Kagel, 2019. "Reference point effects in legislative bargaining: experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 22(3), pages 735-752, September.
    • Handle: RePEc:kap:expeco:v:22:y:2019:i:3:d:10.1007_s10683-017-9559-7
    DOI: 10.1007/s10683-017-9559-7
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    References listed on IDEAS

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    Cited by:

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    2. Duk Gyoo Kim & Wooyoung Lim, 2019. "Multilateral Bargaining over the Division of Losses," CESifo Working Paper Series 8011, CESifo.
    3. Kim, Chulyoung & Kim, Sang-Hyun & Lee, Jinhyuk & Lee, Joosung, 2022. "Strategic alliances in a veto game: An experimental study," European Journal of Political Economy, Elsevier, vol. 75(C).
    4. Li, Shuwen & Houser, Daniel, 2022. "Stochastic bargaining in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 687-715.

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    More about this item

    Keywords

    Reference point effects; Legislative bargaining; Budget deficits versus budget surpluses; Experiment;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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