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Self-Interest, Inequality, and Entitlement in Majoritarian Decision-Making

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  • Diermeier, Daniel
  • Gailmard, Sean
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    Abstract

    We experimentally test competing theories of three-player majoritarian bargaining models with fixed, known disagreement values. Subjects are randomly assigned to three roles: a proposer and two types of voters. Each role is randomly assigned a disagreement value, i.e. a given amount of money he/she will receive if the proposal is rejected. These values are known to all players before any decision is made. Proposers then make a take-it-or-leave-it offer on how to split a fixed, known amount of money among the players. If a majority of players accepts the proposal, the players' payoffs are determined by the proposal; if the proposal is rejected, each player receives his or her reservation value. We assess the ability of three behavioral hypotheses – self-interest, egalitarianism, and inequality-aversion – to account for our results. Our primary design variable is the proposer's reservation value, which allows us to obtain different implications from each hypothesis. We find that each hypothesis is inconsistent with our data in important respects. However, subjects strongly respond to changes in reservation values as if they were interpreted as a basic form of entitlement.

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    File URL: http://dx.doi.org/10.1561/100.00000015
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    Bibliographic Info

    Article provided by now publishers in its journal International Quarterly Journal of Political Science.

    Volume (Year): 1 (2006)
    Issue (Month): 4 (October)
    Pages: 327-350

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    Handle: RePEc:now:jlqjps:100.00000015

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    Web page: http://www.nowpublishers.com/

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    Cited by:
    1. Gary Bolton & Jeannette Brosig-Koch, 2012. "How do coalitions get built? Evidence from an extensive form coalition game with and without communication," International Journal of Game Theory, Springer, vol. 41(3), pages 623-649, August.
    2. Hsu, Li-Chen & Yang, C.C. & Yang, Chun-Lei, 2008. "Positive- versus zero-sum majoritarian ultimatum games: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 498-510, December.
    3. Daniel Diermeier & Pohan Fong, 2009. "Endogenous Limits on Proposal Power," Discussion Papers 1464, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    4. Anita Gantner & Kristian Horn & Rudolf Kerschbamer, 2013. "Fair Division in Unanimity Bargaining with Subjective Claims," Working Papers 2013-31, Faculty of Economics and Statistics, University of Innsbruck.
    5. Guillaume Fréchette & John Kagel & Massimo Morelli, 2012. "Pork versus public goods: an experimental study of public good provision within a legislative bargaining framework," Economic Theory, Springer, vol. 49(3), pages 779-800, April.
    6. Daniel Diermeier & Pohan Fong, 2011. "Legislative Bargaining with Reconsideration," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 947-985.
    7. Francisco Ruge-Murcia & Alessandro Riboni, 2008. "Monetary Policy by Committee: Consensus, Chairman Dominance or Simple Majority?," 2008 Meeting Papers 142, Society for Economic Dynamics.
    8. Luis Miller & Christoph Vanberg, 2011. "Decision costs in legislative bargaining: An experimental analysis," Discussion Papers 2011002, University of Oxford, Nuffield College.
    9. Battaglini, Marco & Palfrey, Thomas R., 2007. "The dynamics of distributive politics," Working Papers 1273, California Institute of Technology, Division of the Humanities and Social Sciences.

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