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Bargaining with indivisibilities

Author

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  • Pham, Vinh
  • Veszteg, Róbert F.
  • Kamijo, Yoshio

Abstract

We study bilateral bargaining with asymmetrical abilities to accept resources, resulting in a non-convex environment. Our primary focus is to examine whether efficient allocations are favored over wasteful equal splits. Our findings indicate a dominance of efficiency over equality: 70% of allocations are strongly efficient, with the majority (64%) corresponding to the Nash bargaining solution (NBS). Across treatments, a higher degree of inequality within the NBS leads to its poorer performance. Equal division accounts for 15% of outcomes, but its frequency drops to near zero when it is strongly Pareto dominated by the NBS. Notably, bargainers who face more constraints in accepting resources are more influential in steering allocations to match their social value orientation (SVO).

Suggested Citation

  • Pham, Vinh & Veszteg, Róbert F. & Kamijo, Yoshio, 2026. "Bargaining with indivisibilities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 122(C).
    • Handle: RePEc:eee:soceco:v:122:y:2026:i:c:s2214804326000224
    DOI: 10.1016/j.socec.2026.102531
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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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