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On the adjudication of conflicting claims: an experimental study

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  • HERRERO, Carmen
  • MORENO-TERNERO, Juan D.
  • PONTI, Giovanni

Abstract

This paper reports an experimental study on three well-known solutions for problems of adjudicating con icting claims: the constrained equal-awards, the proportional, and the constrained equal-losses rules. We first let subjects play three games designed such that the unique equilibrium allocation coincides with the recommendation of one of these three rules. In addition, we let subjects play an additional game, that has the property that all (and only) strategy profiles in which players coordinate on the same rule constitute a strict Nash equilibrium. While in the first three games subjects' play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device, especially when we frame the game with an hypothetical bankruptcy situation. We also administered a questionnaire to a different group of students, asking them to act as impartial arbitrators to solve (among others) the same problems played in the lab. Also in this case, respondents were sensitive to the framing of the questions, but the proportional rule was selected by the vast majority of respondents.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006062.

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Date of creation: 00 Jun 2006
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Handle: RePEc:cor:louvco:2006062

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Keywords: claims problems; proportional rule; experimental economics;

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References

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Citations

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Cited by:
  1. Erik Ansink & Carmen Marchiori, 2009. "Reallocating Water: An Application of Sequent," Working Papers 2009.126, Fondazione Eni Enrico Mattei.
  2. William Thomson, 2013. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: an update," RCER Working Papers 578, University of Rochester - Center for Economic Research (RCER).
  3. GRIMM, Veronika & KOVARIK, Jaromir & PONTI, Giovanni, 2005. "Fixed price plus rationing: an experiment," CORE Discussion Papers 2005039, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Espinosa Alejos, María Paz & Kovarik, Jaromir & Ponti, Giovanni, 2010. "Strategic Interaction and Conventions," DFAEII Working Papers 2010-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
  5. 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.
  6. Marianne Lefebvre, 2011. "Sharing Rules for Common-Pool Resources when Self-insurance is Available: an Experiment," Working Papers 11-22, LAMETA, Universtiy of Montpellier, revised Jun 2012.
  7. Simon G�chter & Arno Riedl, 2004. "Dividing justly in Bargaining Problems with Claims," Tinbergen Institute Discussion Papers 04-044/1, Tinbergen Institute.
  8. Ansink, Erik, 2011. "The Arctic scramble: Introducing claims in a contest model," European Journal of Political Economy, Elsevier, vol. 27(4), pages 693-707.
  9. José M. Jiménez Gómez, 2010. "Noncooperative justifications for old bankruptcy rules," Working Papers. Serie AD 2010-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  10. BOSMANS, Kristof & SCHOKKAERT, Erik, . "Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions," CORE Discussion Papers RP -2166, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Jeremiah Hurley & Neil Buckley & Katherine Cuff & Mita Giacomini & David Cameron, 2011. "Judgments regarding the fair division of goods: the impact of verbal versus quantitative descriptions of alternative divisions," Social Choice and Welfare, Springer, vol. 37(2), pages 341-372, July.

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