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An Experimental Analysis of Asymmetric Power in Conflict Bargaining

Author

Listed:
  • Katri Sieberg

    () (School of Social Science and Humanities, FIN-33014 University of Tampere, Finland)

  • David Clark

    () (Department of Political Science, Binghamton University (SUNY), Binghamton, NY 13902, USA)

  • Charles A. Holt

    () (Department of Economics, University of Virginia. Charlottesville, VA 22904, USA)

  • Timothy Nordstrom

    () (Department of Political Science, The University of Mississippi, Oxford, MS 38677, USA)

  • William Reed

    () (Department of Government & Politics, University of Maryland, 3140 Tydings Hall, College Park, MD 20742, USA)

Abstract

Demands and concessions in a multi-stage bargaining process are shaped by the probabilities that each side will prevail in an impasse. Standard game-theoretic predictions are quite sharp: demands are pushed to the precipice with nothing left on the table, but there is no conflict regardless of the degree of power asymmetry. Indeed, there is no delay in reaching an agreement that incorporates the (unrealized) costs of delay and conflict. A laboratory experiment has been used to investigate the effects of power asymmetries on conflict rates in a two-stage bargaining game that is (if necessary) followed by conflict with a random outcome. Observed demands at each stage are significantly correlated with power, as measured by the probability of winning in the event of disagreement. Demand patterns, however, are flatter than theoretical predictions, and conflict occurs in a significant proportion of the interactions, regardless of the degree of the power asymmetry. To address these deviations from the standard game-theoretic predictions, we also estimated a logit quantal response model, which generated the qualitative patterns that are observed in the data. This one-parameter generalization of the Nash equilibrium permits a deconstruction of the strategic incentives that cause demands to be less responsive to power asymmetries than Nash predictions.

Suggested Citation

  • Katri Sieberg & David Clark & Charles A. Holt & Timothy Nordstrom & William Reed, 2013. "An Experimental Analysis of Asymmetric Power in Conflict Bargaining," Games, MDPI, Open Access Journal, vol. 4(3), pages 1-23, August.
  • Handle: RePEc:gam:jgames:v:4:y:2013:i:3:p:375-397:d:27697
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    References listed on IDEAS

    as
    1. Neelin, Janet & Sonnenschein, Hugo & Spiegel, Matthew, 1988. "A Further Test of Noncooperative Bargaining Theory: Comment," American Economic Review, American Economic Association, vol. 78(4), pages 824-836, September.
    2. Binmore, Ken G & Shaked, Avner & Sutton, John, 1988. "A Further Test of Noncooperative Bargaining Theory: Reply," American Economic Review, American Economic Association, vol. 78(4), pages 837-839, September.
    3. Powell, Robert, 1996. "Bargaining in the Shadow of Power," Games and Economic Behavior, Elsevier, vol. 15(2), pages 255-289, August.
    4. Binmore, Ken & McCarthy, John & Ponti, Giovanni & Samuelson, Larry & Shaked, Avner, 2002. "A Backward Induction Experiment," Journal of Economic Theory, Elsevier, vol. 104(1), pages 48-88, May.
    5. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
    6. Goeree, Jacob K. & Holt, Charles A., 2000. "Asymmetric inequality aversion and noisy behavior in alternating-offer bargaining games," European Economic Review, Elsevier, vol. 44(4-6), pages 1079-1089, May.
    7. Cohen, Michele & Jaffray, Jean-Yves & Said, Tanios, 1987. "Experimental comparison of individual behavior under risk and under uncertainty for gains and for losses," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(1), pages 1-22, February.
    8. repec:cup:apsrev:v:107:y:2013:i:04:p:849-865_00 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2017. "Balance of power and the propensity of conflict," Games and Economic Behavior, Elsevier, vol. 103(C), pages 168-184.

    More about this item

    Keywords

    bargaining; conflict; quantal response equilibrium; laboratory experiments;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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