Equal Splits or Product Prices: An Experiment
This paper compares the choice of focal points in a Nash Demand Game embedded in an abstract frame with the corresponding choices in a game with a real product frame where parties bargain for a well-known consumer product. We find that the frame has a substantial impact on the fraction of subjects choosing the equal split outcome casting doubt on the robustness of this solution in bargaining over real goods. The paper shows that there is notable heterogeneity among subjects with regard to their choices of focal points and reports individual characteristics predicting these choices.
|Date of creation:||02 May 2011|
|Date of revision:||22 Apr 2013|
|Contact details of provider:|| Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden|
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- Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2008.
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IZA Discussion Papers
3517, Institute for the Study of Labor (IZA).
- Mariana Blanco & Dirk Engelmann & Alexander Koch & Hans-Theo Normann, 2010. "Belief elicitation in experiments: is there a hedging problem?," Experimental Economics, Springer, vol. 13(4), pages 412-438, December.
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