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How robust is the equal split? Transferable utility and three-person bargaining in the laboratory

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  • Noemí Navarro

    (Université de Rennes, CNRS)

  • Róbert F. Veszteg

    (Waseda University, School of Political Science and Economics)

Abstract

This paper investigates the robustness of equal-split outcomes in unstructured bargaining environments, expanding on classic two-person settings to include payoff transfers and multi-party bargaining. Drawing from experimental data, we find that equal splits persist as a focal solution in two-person bargaining with payoff transfers, even when some potential efficiency gains are left unexploited, likely due to limitations in participants’ cognitive and strategic sophistication. In three-person settings (without payoff transfers), while agreements align closely with equality, they tend to do so only as long as efficiency and stability criteria are met. Our results suggest that bargaining parties prioritize equality when efficient solutions are complicated to find, but prioritize efficiency when efficient solutions are easily accessible. Also, in multilateral bargaining, coalitional stability becomes a primary concern, whereas it remains a softer constraint in simpler, bilateral negotiations.

Suggested Citation

  • Noemí Navarro & Róbert F. Veszteg, 2025. "How robust is the equal split? Transferable utility and three-person bargaining in the laboratory," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 23(3), pages 909-931, September.
    • Handle: RePEc:spr:joecin:v:23:y:2025:i:3:d:10.1007_s10888-025-09694-5
    DOI: 10.1007/s10888-025-09694-5
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    1. Nejat Anbarci & Nick Feltovich, 2013. "How sensitive are bargaining outcomes to changes in disagreement payoffs?," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 560-596, December.
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    Keywords

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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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