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Decentralized versus collective bargaining - An experimental study

Author

Listed:
  • S. Berninghaus

    (Institut für Statistik u. Mathematische Wirtschaftstheorie, Universität Karlsruhe, 76128 Karlsruhe, Germany)

  • H.-J. Ramser

    (Fakultät f. Volkswirtschaftslehre u. Statistik, Universität Konstanz, 78464 Konstanz, Germany)

  • W. Güth

    (Institut für Wirtschaftstheorie III, Humboldt Universität zu Berlin, 10178 Berlin, Germany)

  • R. Lechler

    (Institut für Wirtschaftstheorie III, Humboldt Universität zu Berlin, 10178 Berlin, Germany)

Abstract

Two parties X, and Y, can either bargain separately with a third party Z or merge to become XY and bargain collectively with Z. Depending on the payoff implications of the two possible contracts and on the asymmetry inherent in the conflict payoffs of X and Y collective bargaining will increase, decrease or leave constant what X and Y achieve together. In the experiment, first X and Y vote for or against collective bargaining and then negotiate accordingly. Participants react adequately to strategic aspects, but not as predicted by the (Nash-)bargaining solution.

Suggested Citation

  • S. Berninghaus & H.-J. Ramser & W. Güth & R. Lechler, 2002. "Decentralized versus collective bargaining - An experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(3), pages 437-448.
    • Handle: RePEc:spr:jogath:v:30:y:2002:i:3:p:437-448
    Note: Received: April 2000/Final version: December 2001
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