This paper investigates whether information about fairness types can be useful in lowering dispute costs and enhancing bargaining efficiency. An experiment was conducted in which subjects were first screened using a dictator game, with the allocations chosen used to separate participants into two types. Mutually anonymous pairs of subjects then bargained, with a dispute cost structure imposed. Sorting with identification reduces dispute costs; there are also significant differences in bargaining efficiency across pairing types. Information about types is crucial for these differences and also strongly affects the relative bargaining success of the two types and the hypothetical optimal bargaining strategy.
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number
284.
Find related papers by JEL classification: J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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