IDEAS home Printed from https://ideas.repec.org/a/spr/sochwe/v52y2019i2d10.1007_s00355-018-1150-4.html
   My bibliography  Save this article

A bargaining experiment with asymmetric institutions and preferences

Author

Listed:
  • Aaron Kamm

    (New York University Abu Dhabi)

  • Harold Houba

    (Vrije Universiteit Amsterdam and Tinbergen Institute)

Abstract

We report results from a laboratory experiment on strategic bargaining with indivisibilities studying the role of asymmetries, both in preferences and institutions. We find that subjects do not fully grasp the equilibrium effects asymmetries have on bargaining power and identify how subjects’ observed behavior systematically deviates from theoretical predictions. The deviations are especially pronounced in case of asymmetric institutions which are modelled as probabilities of being the proposer. Additionally, in contrast to previous experimental work, we observe larger than predicted proposer power since subjects frequently propose and accept their second-preferred option. Quantal response equilibrium and risk aversion explain behavior whenever probabilities are symmetric, but less so when asymmetric. We propose the ‘recognition is power’ heuristic which equates bargaining power with recognition probabilities to explain these findings.

Suggested Citation

  • Aaron Kamm & Harold Houba, 2019. "A bargaining experiment with asymmetric institutions and preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(2), pages 329-351, February.
    • Handle: RePEc:spr:sochwe:v:52:y:2019:i:2:d:10.1007_s00355-018-1150-4
    DOI: 10.1007/s00355-018-1150-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00355-018-1150-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00355-018-1150-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    2. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 10(1), pages 218-254, July.
    3. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    4. Marco Battaglini & Thomas Palfrey, 2012. "The dynamics of distributive politics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(3), pages 739-777, April.
    5. Simon Gächter & Arno Riedl, 2005. "Moral Property Rights in Bargaining with Infeasible Claims," Management Science, INFORMS, vol. 51(2), pages 249-263, February.
    6. Simon G�chter & Arno Riedl, "undated". "Moral Property Rights in Bargaining," IEW - Working Papers 113, Institute for Empirical Research in Economics - University of Zurich.
    7. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 9-41, June.
    8. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
    9. Catherine C. Eckel & Philip J. Grossman, 2008. "Forecasting Risk Attitudes: An Experimental Study Using Actual and Forecast Gamble Choices," Monash Economics Working Papers archive-01, Monash University, Department of Economics.
    10. Frã‰Chette, Guillaume R. & Kagel, John H. & Lehrer, Steven F., 2003. "Bargaining in Legislatures: An Experimental Investigation of Open versus Closed Amendment Rules," American Political Science Review, Cambridge University Press, vol. 97(2), pages 221-232, May.
    11. Frechette, Guillaume R. & Kagel, John H. & Morelli, Massimo, 2005. "Gamson's Law versus non-cooperative bargaining theory," Games and Economic Behavior, Elsevier, vol. 51(2), pages 365-390, May.
    12. Jacob K. Goeree & Charles A. Holt & Thomas R. Palfrey, 2016. "Quantal Response Equilibrium:A Stochastic Theory of Games," Economics Books, Princeton University Press, edition 1, number 10743.
    13. Goeree, Jacob K. & Holt, Charles A., 2005. "An Explanation of Anomalous Behavior in Models of Political Participation," American Political Science Review, Cambridge University Press, vol. 99(2), pages 201-213, May.
    14. Daniel Diermeier & Rebecca Morton, 2005. "Experiments in Majoritarian Bargaining," Studies in Choice and Welfare, in: David Austen-Smith & John Duggan (ed.), Social Choice and Strategic Decisions, pages 201-226, Springer.
    15. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    16. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
    17. Ignacio Esponda Jr. & Emanuel Vespa Jr., 2014. "Hypothetical Thinking and Information Extraction in the Laboratory," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 180-202, November.
    18. Nunnari, Salvatore & Zapal, Jan, 2016. "Gambler's fallacy and imperfect best response in legislative bargaining," Games and Economic Behavior, Elsevier, vol. 99(C), pages 275-294.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nunnari, Salvatore, 2021. "Dynamic legislative bargaining with veto power: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 126(C), pages 186-230.
    2. Breitmoser, Yves & Tan, Jonathan H.W., 2014. "Reference Dependent Altruism," MPRA Paper 52774, University Library of Munich, Germany.
    3. Breitmoser, Yves & Tan, Jonathan H.W., 2020. "Why should majority voting be unfair?," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 281-295.
    4. Miller, Luis & Montero, Maria & Vanberg, Christoph, 2018. "Legislative bargaining with heterogeneous disagreement values: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 107(C), pages 60-92.
    5. Merkel, Anna & Vanberg, Christoph, 2023. "Multilateral bargaining with subjective claims under majority vs. unanimity rule: An experiment," Journal of Economic Psychology, Elsevier, vol. 95(C).
    6. Baron, David P. & Bowen, T. Renee & Nunnari, Salvatore, 2017. "Durable coalitions and communication: Public versus private negotiations," Journal of Public Economics, Elsevier, vol. 156(C), pages 1-13.
    7. Marco Battaglini & Thomas Palfrey, 2012. "The dynamics of distributive politics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(3), pages 739-777, April.
    8. Maaser, Nicola & Paetzel, Fabian & Traub, Stefan, 2019. "Power illusion in coalitional bargaining: An experimental analysis," Games and Economic Behavior, Elsevier, vol. 117(C), pages 433-450.
    9. Benjamin Patrick Evans & Mikhail Prokopenko, 2024. "Bounded rationality for relaxing best response and mutual consistency: the quantal hierarchy model of decision making," Theory and Decision, Springer, vol. 96(1), pages 71-111, February.
    10. Nunnari, Salvatore & Zapal, Jan, 2016. "Gambler's fallacy and imperfect best response in legislative bargaining," Games and Economic Behavior, Elsevier, vol. 99(C), pages 275-294.
    11. Gantner, Anita & Horn, Kristian & Kerschbamer, Rudolf, 2016. "Fair and efficient division through unanimity bargaining when claims are subjective," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 56-73.
    12. Quement, Mark T. Le & Marcin, Isabel, 2020. "Communication and voting in heterogeneous committees: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 449-468.
    13. Dan Levin & James Peck & Asen Ivanov, 2016. "Separating Bayesian Updating from Non-Probabilistic Reasoning: An Experimental Investigation," American Economic Journal: Microeconomics, American Economic Association, vol. 8(2), pages 39-60, May.
    14. Mark T. Le Quement & Isabel Marcin, 2016. "Communication and voting in heterogeneous committees: An experimental study," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_05, Max Planck Institute for Research on Collective Goods, revised Oct 2016.
    15. Wagner, Alexander K. & Granic, Dura-Georg, 2017. "Tie-Breaking Power in Committees," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168187, Verein für Socialpolitik / German Economic Association.
    16. Christiansen, Nels, 2015. "Greasing the wheels: Pork and public goods contributions in a legislative bargaining experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 64-79.
    17. Tremewan, James & Vanberg, Christoph, 2018. "Voting rules in multilateral bargaining: using an experiment to relax procedural assumptions," Working Papers 0651, University of Heidelberg, Department of Economics.
    18. Hsu, Li-Chen & Yang, C.C. & Yang, Chun-Lei, 2008. "Positive- versus zero-sum majoritarian ultimatum games: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 498-510, December.
    19. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    20. Baron, David P. & Bowen, T. Renee, 2013. "Dynamic Coalitions," Research Papers 2128, Stanford University, Graduate School of Business.

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    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:spr:sochwe:v:52:y:2019:i:2:d:10.1007_s00355-018-1150-4. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.