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On the adjudication of conflicting claims: an experimental study

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  • Carmen Herrero
  • Juan Moreno-Ternero
  • Giovanni Ponti

Abstract

This paper reports an experimental study on three well-known solutions for problems of adjudicating conflicting claims: the constrained equal awards, the proportional, and the constrained equal losses rules. We first let subjects play three games designed such that the unique equilibrium allocation coincides with the recommendation of one of these three rules. In addition, we let subjects play an additional game, that has the property that all (and only) strategy profiles in which players coordinate on the same rule constitute a strict Nash equilibrium. While in the first three games subjectsÕ play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device, especially when we frame the game as an hypothetical bankruptcy situation. We also administered a questionnaire to a different group of students, asking them to act as impartial arbitrators to solve (among others) the same problems played in the lab. Also in this case, respondents were sensitive to the framing of the questions, but the proportional rule was selected by the vast majority of respondents.
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Suggested Citation

  • Carmen Herrero & Juan Moreno-Ternero & Giovanni Ponti, 2010. "On the adjudication of conflicting claims: an experimental study," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(1), pages 145-179, January.
    • Handle: RePEc:spr:sochwe:v:34:y:2010:i:1:p:145-179
    DOI: 10.1007/s00355-009-0398-0
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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