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Equal Split in the Informal Market for Group Train Travel

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  • Israel Waichman
  • Artem Korzhenevych
  • Till Requate

Abstract

In this paper we make use of a unique dataset collected in the central train station of Kiel, Germany. A group ticket is used by individual proposers who search for co-travelers to share the ride with shortly before the train departure. The bargaining behavior resembles the Ultimatum game to the extent that proposers request a fixed price for a shared ride and potential co-travelers usually accept or reject the deal. We observe that the prevailing price corresponds to the equal split of the ticket cost between the maximum possible number of co-travelers. This result is remarkable because the positions of the bargaining parties are hardly symmetric and the formation of the full group is not guaranteed. Using a simple agent-based model we are able to identify some sufficient conditions leading to the observed distribution of prices. Finally, we show that the probability to accept an unusually high offer is decreasing with the price and increasing when the offer is made right before the train departure

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File URL: http://www.ifw-members.ifw-kiel.de/publications/equal-split-in-the-informal-market-for-group-train-travel/equal-split-in-the-informal-market-for-group-train-travel
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1638.

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Length: 28 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:kie:kieliw:1638

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Keywords: natural field experiment; bargaining; focal point; equal split; agent-based model;

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  1. Guth, Werner & Huck, Steffen & Muller, Wieland, 2001. "The Relevance of Equal Splits in Ultimatum Games," Games and Economic Behavior, Elsevier, vol. 37(1), pages 161-169, October.
  2. Simon G�chter & Arno Riedl, 2003. "Moral Property Rights in Bargaining with Infeasible Claims," Tinbergen Institute Discussion Papers 03-055/1, Tinbergen Institute.
  3. Bosch-Domènech, Antoni & Vriend, Nicolaas J., 2013. "On the role of non-equilibrium focal points as coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 52-67.
  4. Janssen, Maarten C.W., 2006. "On the strategic use of focal points in bargaining situations," Journal of Economic Psychology, Elsevier, vol. 27(5), pages 622-634, October.
  5. 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.
  6. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-50, May.
  7. Bacharach, Michael & Bernasconi, Michele, 1997. "The Variable Frame Theory of Focal Points: An Experimental Study," Games and Economic Behavior, Elsevier, vol. 19(1), pages 1-45, April.
  8. Maarten Janssen, 2001. "Rationalizing Focal Points," Theory and Decision, Springer, vol. 50(2), pages 119-148, March.
  9. Armin Falk & Ernst Fehr & Urs Fischbacher, 2003. "Reasons for Conflict: Lessons from Bargaining Experiments," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(1), pages 171-, March.
  10. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
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