IDEAS home Printed from https://ideas.repec.org/p/nad/wpaper/20190032.html
   My bibliography  Save this paper

Communication in Multilateral Bargaining with Joint Production

Author

Listed:
  • Andrzej Baranski
  • Caleb A. Cox

    (Division of Social Science)

Abstract

We experimentally investigate the effect on efficiency of pre-bargaining communication in a multilateral majoritarian bargaining game with joint production under two conditions: observable and unobservable productive investments. In both conditions, communication mainly fosters fair sharing and is rarely used by proposers to pit voters against each other. A virtuous cycle of proportional surplus sharing arises in treatments with observable investments regardless of whether communication is possible leading to high efficiency gains over time. In the absence of investment observability, communication is widely used by subjects to truthfully report their investments, which coupled with calls for equitable sharing, allows for substantial efficiency gains. These results contrast sharply with previous findings on bargaining over an exogenous fund where communication leads to highly unequal outcomes, competitive messages, and virtually no calls for fair sharing.

Suggested Citation

  • Andrzej Baranski & Caleb A. Cox, 2019. "Communication in Multilateral Bargaining with Joint Production," Working Papers 20190032, New York University Abu Dhabi, Department of Social Science, revised Nov 2019.
    • Handle: RePEc:nad:wpaper:20190032
    as

    Download full text from publisher

    File URL: https://nyuad.nyu.edu/content/dam/nyuad/academics/divisions/social-science/working-papers/2019/0032.pdf
    File Function: First version, 2019
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    2. Guillaume Fréchette & John H. Kagel & Massimo Morelli, 2005. "Behavioral Identification in Coalitional Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Econometrica, Econometric Society, vol. 73(6), pages 1893-1937, November.
    3. Miller, Luis & Montero, Maria & Vanberg, Christoph, 2018. "Legislative bargaining with heterogeneous disagreement values: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 107(C), pages 60-92.
    4. Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006. "Communication and punishment in voluntary contribution experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 11-26, May.
    5. Klaus Abbink & Lu Dong & Lingbo Hugang, 2018. "Talking Behind Your Back: Asymmetric Communication in a Three-person Dilemma," Discussion Papers 2018-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    6. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    7. Herings, P. Jean-Jacques & Meshalkin, Andrey & Predtetchinski, Arkadi, 2018. "Subgame perfect equilibria in majoritarian bargaining," Journal of Mathematical Economics, Elsevier, vol. 76(C), pages 101-112.
    8. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    9. Hülya Eraslan & Kirill S. Evdokimov, 2019. "Legislative and Multilateral Bargaining," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 443-472, August.
    10. Andreoni, James & Rao, Justin M., 2011. "The power of asking: How communication affects selfishness, empathy, and altruism," Journal of Public Economics, Elsevier, vol. 95(7), pages 513-520.
    11. Ostrom, Elinor & Walker, James & Gardner, Roy, 1992. "Covenants with and without a Sword: Self-Governance Is Possible," American Political Science Review, Cambridge University Press, vol. 86(2), pages 404-417, June.
    12. Isaac, R Mark & Walker, James M, 1988. "Communication and Free-Riding Behavior: The Voluntary Contribution Mechanism," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 585-608, October.
    13. Eraslan, Hulya & Evdokimov, Kirill S., 2019. "Legislative and Multilateral Bargaining," Working Papers 19-007, Rice University, Department of Economics.
    14. Andrzej Baranski & John H. Kagel, 2015. "Communication in legislative bargaining," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 59-71, July.
    15. Andrzej Baranski, 2016. "Voluntary Contributions and Collective Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 149-173, November.
    16. Baron, David P. & Bowen, T. Renee & Nunnari, Salvatore, 2017. "Durable coalitions and communication: Public versus private negotiations," Journal of Public Economics, Elsevier, vol. 156(C), pages 1-13.
    17. Andrzej Baranski, 2019. "Endogenous claims and collective production: an experimental study on the timing of profit-sharing negotiations and production," Experimental Economics, Springer;Economic Science Association, vol. 22(4), pages 857-884, December.
    18. Simon Gächter & Arno Riedl, 2006. "Dividing Justly in Bargaining Problems with Claims," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 27(3), pages 571-594, December.
    19. Daniel Diermeier & Rebecca Morton, 2005. "Experiments in Majoritarian Bargaining," Studies in Choice and Welfare, in: David Austen-Smith & John Duggan (ed.), Social Choice and Strategic Decisions, pages 201-226, Springer.
    20. Dennie van Dolder & Martijn J. van den Assem & Colin F. Camerer & Richard H. Thaler, 2015. "Standing United or Falling Divided? High Stakes Bargaining in a TV Game Show," American Economic Review, American Economic Association, vol. 105(5), pages 402-407, May.
    21. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    22. Dong, Lu & Falvey, Rod & Luckraz, Shravan, 2019. "Fair share and social efficiency: A mechanism in which peers decide on the payoff division," Games and Economic Behavior, Elsevier, vol. 115(C), pages 209-224.
    23. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Darius Schlangenotto & Wendelin Schnedler & Radovan Vadovič, 2020. "Against All Odds: Tentative Steps toward Efficient Information Sharing in Groups," Games, MDPI, vol. 11(3), pages 1-24, August.
    2. Andrzej Baranski & Rebecca Morton, 2022. "The determinants of multilateral bargaining: a comprehensive analysis of Baron and Ferejohn majoritarian bargaining experiments," Experimental Economics, Springer;Economic Science Association, vol. 25(4), pages 1079-1108, September.
    3. Anita Gantner & Regine Oexl, 2023. "Respecting entitlements in legislative bargaining: A matter of preference or necessity?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 490-519, May.
    4. Regine Oexl & Anita Gantner, 2021. "Respecting Entitlements in Legislative Bargaining - A Matter of Preference or Necessity?," Working Papers 2021-25, Faculty of Economics and Statistics, Universität Innsbruck.
    5. Brock V. Stoddard & Caleb A. Cox & James M. Walker, 2021. "Incentivizing provision of collective goods: Allocation rules," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1345-1365, April.
    6. Merkel, Anna & Vanberg, Christoph, 2023. "Multilateral bargaining with subjective claims under majority vs. unanimity rule: An experiment," Journal of Economic Psychology, Elsevier, vol. 95(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrzej Baranski & Caleb A. Cox, 2023. "Communication in multilateral bargaining with joint production," Experimental Economics, Springer;Economic Science Association, vol. 26(1), pages 55-77, March.
    2. Andrzej Baranski & Rebecca Morton, 2022. "The determinants of multilateral bargaining: a comprehensive analysis of Baron and Ferejohn majoritarian bargaining experiments," Experimental Economics, Springer;Economic Science Association, vol. 25(4), pages 1079-1108, September.
    3. Andrzej Baranski & Ernesto Reuben, 2023. "Competing for Proposal Rights: Theory and Experimental Evidence," Working Papers 20220085, New York University Abu Dhabi, Department of Social Science, revised Mar 2023.
    4. Klaus Abbink & Lu Dong & Lingbo Hugang, 2018. "Talking Behind Your Back: Asymmetric Communication in a Three-person Dilemma," Discussion Papers 2018-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    5. Baranski, Andrzej & Haas, Nicholas, 2023. "The timing of communication and retaliation in bargaining: An experimental study," Journal of Economic Psychology, Elsevier, vol. 96(C).
    6. Merkel, Anna & Vanberg, Christoph, 2023. "Multilateral bargaining with subjective claims under majority vs. unanimity rule: An experiment," Journal of Economic Psychology, Elsevier, vol. 95(C).
    7. Baron, David P. & Bowen, T. Renee & Nunnari, Salvatore, 2017. "Durable coalitions and communication: Public versus private negotiations," Journal of Public Economics, Elsevier, vol. 156(C), pages 1-13.
    8. Kira Pronin & Jonathan Woon, 2023. "Does allowing private communication lead to less prosocial collective choice?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(4), pages 625-645, May.
    9. Maaser, Nicola & Paetzel, Fabian & Traub, Stefan, 2019. "Power illusion in coalitional bargaining: An experimental analysis," Games and Economic Behavior, Elsevier, vol. 117(C), pages 433-450.
    10. Cesar Martinelli & Thomas R. Palfrey, 2017. "Communication and Information in Games of Collective Decision: A Survey of Experimental Results," Working Papers 1065, George Mason University, Interdisciplinary Center for Economic Science.
    11. Andrzej Baranski, 2019. "Endogenous claims and collective production: an experimental study on the timing of profit-sharing negotiations and production," Experimental Economics, Springer;Economic Science Association, vol. 22(4), pages 857-884, December.
    12. Li, Shuwen & Houser, Daniel, 2022. "Stochastic bargaining in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 687-715.
    13. repec:nad:wpaper:20220080 is not listed on IDEAS
    14. Nunnari, Salvatore, 2021. "Dynamic legislative bargaining with veto power: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 126(C), pages 186-230.
    15. Andrzej Baranski & D.J. da Cunha Batista Geraldes & Ada Kovaliukaite & James Tremewan, 2021. "Experiment on Gender Representation in Majoritarian Bargaining," Working Papers 2102, Utrecht School of Economics.
    16. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    17. Duk Gyoo Kim & Sang‐Hyun Kim, 2022. "Multilateral bargaining with proposer selection contest," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 38-73, February.
    18. Kim, Duk Gyoo, 2023. "“One Bite at the apple”: Legislative bargaining without replacement," Journal of Economic Psychology, Elsevier, vol. 95(C).
    19. Regine Oexl & Anita Gantner, 2021. "Respecting Entitlements in Legislative Bargaining - A Matter of Preference or Necessity?," Working Papers 2021-25, Faculty of Economics and Statistics, Universität Innsbruck.
    20. Gantner, Anita & Horn, Kristian & Kerschbamer, Rudolf, 2016. "Fair and efficient division through unanimity bargaining when claims are subjective," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 56-73.
    21. Andrzej Baranski & John H. Kagel, 2015. "Communication in legislative bargaining," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 59-71, July.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nad:wpaper:20190032. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alizeh Batra (email available below). General contact details of provider: https://edirc.repec.org/data/ecnyuae.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.