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Group Decision-Making and Voting in Ultimatum Bargaining: An Experimental Study

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Author Info
Alexander Elbittar (CIDE)
Andrei Gomberg (ITAM)
Laura Sour (CIDE)

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Abstract

Many rent-sharing decisions in a society result from a bargaining process between groups of individuals (such as between the executive and the legislative branches of government, between legislative factions, between corporate management and shareholders, etc.). We conduct a laboratory study of the effect of different voting procedures on group decision-making in the context of ultimatum bargaining. Earlier studies have suggested that when the bargaining game is played by unstructured groups of agents, rather than by individuals, the division of the payoff is substantially affected in favor of the ultimatum-proposers. Our theoretical arguments suggest that one explanation for this could be implicit voting rules within groups. We explicitly structure the group decision-making as voting and study the impact of different voting rules on the bargaining outcome. The observed responder behavior is consistent with preferences depending solely on payoff distribution. Furthermore, we observe that proposers react in an expected manner to changes in voting rule in the responder group.

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Paper provided by EconWPA in its series Microeconomics with number 0511005.

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Length: 41 pages
Date of creation: 11 Nov 2005
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Handle: RePEc:wpa:wuwpmi:0511005

Note: Type of Document - pdf; pages: 41
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Related research
Keywords: Bargaining games; group decision making and experimental design.;

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Find related papers by JEL classification:
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

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