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Self-Selecting Random or Cumulative Pay? A Bargaining Experiment

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  • Arianna Galliera

Abstract

The incentive scheme in a multi-task experiment might trigger different types of behavior in participants. This experimental study allows participants to decide between being paid for a random task or the average across all tasks. In a bargaining game buyer and seller have partly conflicting interests and are asymmetrically informed. Participants choose the incentive scheme based on past experience where we also control for individual characteristics. Although payment method is likely correlated to risk preferences it also might be influenced by egodefensive concerns. Will, for example, participants avoid cumulative payment which reveals, more reliably, own performance? So far little research is devoted to the analysis of self-selected Random Lottery Incentives and Cumulative Scheme both on individual and social results. This paper aims to fill the gap.

Suggested Citation

  • Arianna Galliera, 2016. "Self-Selecting Random or Cumulative Pay? A Bargaining Experiment," Working Papers CESARE 2/2016, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    • Handle: RePEc:lui:cesare:1602
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    Cited by:

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    2. Seth, Himanshu & Talwar, Shalini & Bhatia, Anuj & Saxena, Akanksha & Dhir, Amandeep, 2020. "Consumer resistance and inertia of retail investors: Development of the resistance adoption inertia continuance (RAIC) framework," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).

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    More about this item

    Keywords

    bargaining; experiment; gender; payment scheme.;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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