IDEAS home Printed from https://ideas.repec.org/p/cbt/econwp/08-09.html
   My bibliography  Save this paper

The Effect of Historical Entitlements in Cooperative Bargaining Over Evironment Policy: An Experimental Test

Author

Listed:

Abstract

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.

Suggested Citation

  • Christopher Bruce & Jeremy Clark, 2008. "The Effect of Historical Entitlements in Cooperative Bargaining Over Evironment Policy: An Experimental Test," Working Papers in Economics 08/09, University of Canterbury, Department of Economics and Finance.
  • Handle: RePEc:cbt:econwp:08/09
    as

    Download full text from publisher

    File URL: https://repec.canterbury.ac.nz/cbt/econwp/0809.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    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. Christopher Bruce & Jeremy Clark, 2010. "The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 157-182, February.
    2. Feltovich, Nick & Swierzbinski, Joe, 2011. "The role of strategic uncertainty in games: An experimental study of cheap talk and contracts in the Nash demand game," European Economic Review, Elsevier, vol. 55(4), pages 554-574, May.
    3. Jan Stoop, 2014. "From the lab to the field: envelopes, dictators and manners," Experimental Economics, Springer;Economic Science Association, vol. 17(2), pages 304-313, June.
    4. Nejat Anbarci & Nick Feltovich, 2013. "How responsive are people to changes in their bargaining position? Earned bargaining power and the 50–50 norm," EcoMod2013 5855, EcoMod.
    5. Fiedler, Marina & Haruvy, Ernan, 2009. "The lab versus the virtual lab and virtual field--An experimental investigation of trust games with communication," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 716-724, November.
    6. Feltovich, Nick, 2019. "Is earned bargaining power more fully exploited?," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 152-180.
    7. Friesen, Lana & MacKenzie, Ian A. & Nguyen, Mai Phuong, 2023. "Initially contestable property rights and Coase: Evidence from the lab," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    8. Rode, Julian & Le Menestrel, Marc, 2011. "The influence of decision power on distributive fairness," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 246-255, August.
    9. Gary Charness & James Cox & Catherine Eckel & Charles Holt & Brian Jabarian, 2023. "The Virtues of Lab Experiments," CESifo Working Paper Series 10796, CESifo.
    10. Kimbrough, Erik O. & Wilson, Bart J., 2013. "Insiders, outsiders, and the adaptability of informal rules to ecological shocks," Ecological Economics, Elsevier, vol. 90(C), pages 29-40.
    11. Belot, Michele & Duch, Raymond & Miller, Luis, 2015. "A comprehensive comparison of students and non-students in classic experimental games," Journal of Economic Behavior & Organization, Elsevier, vol. 113(C), pages 26-33.
    12. Tausch, Franziska & Potters, Jan & Riedl, Arno, 2013. "Preferences for redistribution and pensions. What can we learn from experiments?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(3), pages 298-325, July.
    13. David B. Johnson & Jonathan Rogers, 2023. "First You Get the Money, Then You Get the Power: The Effect of Cheating on Altruism," Games, MDPI, vol. 14(3), pages 1-21, May.
    14. Rafael Di Tella & Ricardo Pérez-Truglia, 2010. "Conveniently Upset: Avoiding Altruism by Distorting Beliefs About Others," NBER Working Papers 16645, National Bureau of Economic Research, Inc.
    15. Sheryl Ball & Chetan Dave & Stefan Dodds, 2023. "Enumerating rights: more is not always better," Public Choice, Springer, vol. 196(3), pages 403-425, September.
    16. Jakiela, Pamela, 2015. "How fair shares compare: Experimental evidence from two cultures," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 40-54.
    17. Erik O. Kimbrough & Alexander Vostroknutov, 2016. "Norms Make Preferences Social," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 608-638, June.
    18. Rigdon, Mary & Ishii, Keiko & Watabe, Motoki & Kitayama, Shinobu, 2009. "Minimal social cues in the dictator game," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 358-367, June.
    19. Iida, Yoshio, 2015. "Task-based income inequalities and redistribution preferences: A comparison of China and Japan," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 55(C), pages 91-102.
    20. Anbarci, Nejat & Feltovich, Nick, 2018. "How fully do people exploit their bargaining position? The effects of bargaining institution and the 50–50 norm," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 320-334.

    More about this item

    Keywords

    Historical entitlements; Collaborative policy making; Land use conflicts;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    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:cbt:econwp:08/09. 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: Albert Yee (email available below). General contact details of provider: https://edirc.repec.org/data/decannz.html .

    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.