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Bargaining over Treatment Choice under Disagreement

Author

Listed:
  • Nabil I. Al-Najjar
  • Robert J. Gary-Bobo

Abstract

A group of experts with different prior beliefs must choose a treatment. A dataset is made public and leads to revisions of beliefs. We propose a model where the experts' disagreements are resolved through bargaining, using the Nash bargaining solution. Experts bargain after disclosure of the dataset. Bargaining may lead to an inefficient use of information in a strong sense: experts receive a lower payoff in every state and for any prior belief (i.e., inadmissibility). Bargaining exhibits underreaction to information as compared to the normative solution in which experts bargain ex ante on the procedure used to exploit the data.

Suggested Citation

  • Nabil I. Al-Najjar & Robert J. Gary-Bobo, 2023. "Bargaining over Treatment Choice under Disagreement," American Economic Journal: Microeconomics, American Economic Association, vol. 15(3), pages 387-425, August.
    • Handle: RePEc:aea:aejmic:v:15:y:2023:i:3:p:387-425
    DOI: 10.1257/mic.20210392
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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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