The Effect of Historical Entitlements in Cooperative Bargaining Over Evironment Policy: An Experimental Test
Collaborative policy making has been an increasingly popular method of solving use conflicts on public lands. Representatives of interested groups are authorized to negotiate land use policy in the shadow of a government imposed backstop policy. This process can be modeled using cooperative game theory over multiple goods in an Edgeworth Box framework, and its outcomes predicted using axiomatic bargaining theories (e.g. Pareto efficiency or the Nash bargain). A challenge for collaborative policymaking arises when users’ historical land use entitlements differ from the backstop the government will impose if negotiations fail. A challenge for the predictive power of axiomatic bargaining theory arises when the government’s backstop policy (and the Nash bargain it generates) creates substantial inequality of benefits among users. In this paper, we use laboratory experiments to test the effect on bargaining of 1) the divergence of historical entitlements from the prospective backstop and 2) the divergence of the Nash bargain generated by the backstop policy from the outcome that equalizes benefits. We examine the effects of both types of divergence on agreement rates, and on the likelihood that parties settle inside the bargaining lens, on the contract curve, and at the Nash bargain. We find that divergence of historical entitlements from the backstop significantly changes bargaining outcomes when the historical benefits were equally distributed and the benefits at the backstop and Nash are not. At the same time, historical entitlements do not affect outcomes when they were unequal but the backstop and Nash bargain generate equal benefits. We also find the outcomes parties reach are affected by the divergence of equality from the Nash bargain, independent of historical entitlement.
|Date of creation:||26 May 2008|
|Contact details of provider:|| Postal: Private Bag 4800, Christchurch, New Zealand|
Phone: 64 3 369 3123 (Administrator)
Fax: 64 3 364 2635
Web page: http://www.econ.canterbury.ac.nz
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
- Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006.
"Communication and punishment in voluntary contribution experiments,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 60(1), pages 11-26, May.
- Olivier Bochet & Talbot Page & Louis Putterman, 2005. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2005-09, Brown University, Department of Economics.
- Oliver Bochet & Talbot Page & Louis Putterman, 2002. "Communication and Punishment in Voluntary Contribution Experiments," Working Papers 2002-29, Brown University, Department of Economics.
- Hoffman, Elizabeth & Spitzer, Matthew L, 1982.
"The Coase Theorem: Some Experimental Tests,"
Journal of Law and Economics,
University of Chicago Press, vol. 25(1), pages 73-98, April.
- Oxoby, Robert J. & Spraggon, John, 2008. "Mine and yours: Property rights in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 703-713, March.
- Croson, Rachel & Boles, Terry & Murnighan, J. Keith, 2003. "Cheap talk in bargaining experiments: lying and threats in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 143-159, June.
- Murnighan, J Keith & Roth, Alvin E & Schoumaker, Francoise, 1988.
"Risk Aversion in Bargaining: An Experimental Study,"
Journal of Risk and Uncertainty,
Springer, vol. 1(1), pages 101-124, March.
- Murnigham, J.K. & Roth, A.E. & Schoumaker, F., 1985. "Risk Aversion in Bargaining: an Experimental Study," Cahiers de recherche 8536, Universite de Montreal, Departement de sciences economiques.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Buchan, Nancy R. & Johnson, Eric J. & Croson, Rachel T.A., 2006. "Let's get personal: An international examination of the influence of communication, culture and social distance on other regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 373-398, July.
- Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-660, June.
- Harrison, Glenn W & McKee, Michael, 1985. "Experimental Evaluation of the Coase Theorem," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 653-670, October.
When requesting a correction, please mention this item's handle: RePEc:cbt:econwp:08/09. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Albert Yee)
If references are entirely missing, you can add them using this form.