IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v167y2019icp152-180.html
   My bibliography  Save this article

Is earned bargaining power more fully exploited?

Author

Listed:
  • Feltovich, Nick

Abstract

In past experiments involving a wide range of bargaining settings, individuals exploited their bargaining position less fully than standard theory predicts. Typically, these experiments allocated bargaining position randomly, so that bargainers, viewing their position as unearned, may have been reluctant to fully exploit it. We investigate the impact of earned bargaining power using theory and experiment. In our “Earned” treatment, disagreement payoffs – and hence bargaining power – are based on performance on a real–effort task. In our “Assigned” treatment, subjects perform the task but disagreement payoffs are randomly assigned. Our “Notask” treatment is like the Assigned treatment but without the task. Comparison of our Earned and Assigned treatments provides our main result: subjects are more responsive to changes in bargaining position when it is earned. Responsiveness is also often higher in our Assigned treatment than in our Notask treatment – suggesting a possible effect of merely including a status–irrelevant task – though these differences are usually insignificant.

Suggested Citation

  • Feltovich, Nick, 2019. "Is earned bargaining power more fully exploited?," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 152-180.
  • Handle: RePEc:eee:jeborg:v:167:y:2019:i:c:p:152-180
    DOI: 10.1016/j.jebo.2019.09.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268119302951
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Nash demand game; Unstructured bargaining; Real effort; Equal split; Experiment;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    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:eee:jeborg:v:167:y:2019:i:c:p:152-180. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jebo .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.