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Dividing justly in Bargaining Problems with Claims

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Author Info
Simon Gächter () (University of St Gallen, CESifo, and IZA)
Arno Riedl () (Faculty of Economics and Econometrics, Universiteit van Amsterdam)

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Abstract

Theoretical research on claims problems has concentrated on normative properties and axiomatizations of solution concepts. We complement these analyses by empirical evidence on the predictability of three classical solution concepts in a bankruptcy problem. We examine both people's impartial normative evaluations as well as their actual negotiation behavior in a bargaining with claims environment. We measure people's judgments on the normative attractiveness of solution concepts with the help of a survey and also observe actual agreements in a bargaining experiment with real money at stake. We find that the proportional solution is the normatively most attractive rule, whereas actual negotiation agreements are closest to the 'constrained equal award' solution.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-044/1.

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Date of creation: 23 Apr 2004
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Handle: RePEc:dgr:uvatin:20040044

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: Bankruptcy problems with claims; proportional rule; equal-awards rule; equal-losses rule; fairness; laboratory experiment; vignette;

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November. [Downloadable!] (restricted)
  2. O'Neill, Barry, 1982. "A problem of rights arbitration from the Talmud," Mathematical Social Sciences, Elsevier, vol. 2(4), pages 345-371, June. [Downloadable!] (restricted)
  3. Herrero, Carmen & Villar, Antonio, 2001. "The three musketeers: four classical solutions to bankruptcy problems," Mathematical Social Sciences, Elsevier, vol. 42(3), pages 307-328, November. [Downloadable!] (restricted)
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  4. Chun, Youngsub & Thomson, William, 1992. "Bargaining problems with claims," Mathematical Social Sciences, Elsevier, vol. 24(1), pages 19-33, August. [Downloadable!] (restricted)
    Other versions:
  5. Babcock, Linda, et al, 1995. "Biased Judgments of Fairness in Bargaining," American Economic Review, American Economic Association, vol. 85(5), pages 1337-43, December. [Downloadable!] (restricted)
  6. Volij, Oscar & Dagan, Nir & Serrano, Roberto, 2002. "A Non-Cooperative View of Consistent Bankruptcy Rules," Staff General Research Papers 5130, Iowa State University, Department of Economics.
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  7. Hervé Moulin, 2000. "Priority Rules and Other Asymmetric Rationing Methods," Econometrica, Econometric Society, vol. 68(3), pages 643-684, May.
  8. Nir Dagan, 1996. "New Characterizations of Old Bankruptcy Rules," Economic theory and game theory 002, Nir Dagan. [Downloadable!]
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  9. Steven R. Beckman & Buhong Zheng & John P. Formby & W. James Smith, 2002. "Envy, malice and Pareto efficiency: An experimental examination," Social Choice and Welfare, Springer, vol. 19(2), pages 349-367. [Downloadable!] (restricted)
  10. Simon Gächter & Arno Riedl, . "Moral Property Rights in Bargaining," IEW - Working Papers iewwp113, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  11. Roth, Alvin E & Murnighan, J Keith & Schoumaker, Francoise, 1988. "The Deadline Effect in Bargaining: Some Experimental Evidence," American Economic Review, American Economic Association, vol. 78(4), pages 806-23, September. [Downloadable!] (restricted)
  12. Sheryl Ball & Catherine Eckel & Philip J. Grossman & William Zame, 2001. "Status In Markets," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 161-188, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Birendra K. Rai, 2006. "Evolution of Division Rules," Papers on Strategic Interaction 2006-27, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  2. HERRERO, Carmen & MORENO-TERNERO, Juan D. & PONTI, Giovanni, 2006. "On the adjudication of conflicting claims: an experimental study," CORE Discussion Papers 2006062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
    Other versions:
  3. Stefania Ottone & Ferruccio Ponzano & Luca Zarri, 2008. "Moral Sentiments and Material Interests behind Altruistic Third-Party Punishment," Working Papers 48, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
  4. Maria Montero & Martin Sefton & Ping Zhang, 2008. "Enlargement and the balance of power: an experimental study," Social Choice and Welfare, Springer, vol. 30(1), pages 69-87, January. [Downloadable!] (restricted)
    Other versions:
  5. Karagozoglu, Emin, 2008. "A Noncooperative Approach to Bankruptcy Problems with an Endogenous Estate," Research Memoranda 031, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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