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On the Adjudication of Conflicting Claims: An Experimental Study

Author

Listed:
  • Carmen Herrero

    () (Universidad de Alicante)

  • Juan D. Moreno-Ternero

    () (Department of Economic Theory, Universidad de Málaga)

  • Giovanni Ponti

    () (Universidad de Alicante)

Abstract

This paper reports an experimental study on three well-known solutions for problems of adjudicating conflicting claims: the constrained equal awards, the proportional, and the constrained equal losses rules. We first let subjects play three games designed such that the unique equilibrium allocation coincides with the recommendation of one of these three rules. In addition, we let subjects play an additional game, that has the property that all (and only) strategy profiles in which players coordinate on the same rule constitute a strict Nash equilibrium. While in the first three games subjectsÕ play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device, especially when we frame the game as an hypothetical bankruptcy situation. We also administered a questionnaire to a different group of students, asking them to act as impartial arbitrators to solve (among others) the same problems played in the lab. Also in this case, respondents were sensitive to the framing of the questions, but the proportional rule was selected by the vast majority of respondents.

Suggested Citation

  • Carmen Herrero & Juan D. Moreno-Ternero & Giovanni Ponti, 2009. "On the Adjudication of Conflicting Claims: An Experimental Study," Working Papers 2009-5, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
  • Handle: RePEc:mal:wpaper:2009-5
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    References listed on IDEAS

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    Cited by:

    1. Ansink, Erik, 2011. "The Arctic scramble: Introducing claims in a contest model," European Journal of Political Economy, Elsevier, vol. 27(4), pages 693-707.
    2. repec:spr:series:v:8:y:2017:i:2:d:10.1007_s13209-016-0151-8 is not listed on IDEAS
    3. Espinosa Alejos, María Paz & Kovarik, Jaromir & Ponti, Giovanni, 2010. "Strategic Interaction and Conventions," DFAEII Working Papers 2010-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
    4. 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.
    5. Jeremiah Hurley & Neil Buckley & Katherine Cuff & Mita Giacomini & David Cameron, 2011. "Judgments regarding the fair division of goods: the impact of verbal versus quantitative descriptions of alternative divisions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(2), pages 341-372, July.
    6. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
    7. Rodriguez-Lara, Ismael, 2016. "Equity and bargaining power in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 144-165.
    8. Veronika Grimm & Jaromir Kovarik & Giovanni Ponti, 2008. "Fixed price plus rationing: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 11(4), pages 402-422, December.
    9. Giménez Gómez, José M. (José Manuel) & Blanco Gil, Carmen & Sánchez García, Juan Francisco, 2016. "New insights on empirical conflicting claims problems," Working Papers 2072/261530, Universitat Rovira i Virgili, Department of Economics.
    10. Marianne Lefebvre, 2011. "Sharing Rules for Common-Pool Resources when Self-insurance is Available: an Experiment," Working Papers 11-22, LAMETA, Universtiy of Montpellier, revised Jun 2012.
    11. Kristof Bosmans & Erik Schokkaert, 2009. "Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(4), pages 533-557, November.
    12. Anita Gantner & Kristian Horn & Rudolf Kerschbamer, 2013. "Fair Division in Unanimity Bargaining with Subjective Claims," Working Papers 2013-31, Faculty of Economics and Statistics, University of Innsbruck.
    13. Erik Ansink & Carmen Marchiori, 2015. "Reallocating Water: An Application of Sequential Sharing Rules to Cyprus," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(04), pages 1-22, December.
    14. Cappelen, Alexander W. & Luttens, Roland I. & Sørensen, Erik Ø. & Tungodden, Bertil, 2015. "Fairness in bankruptcy situations: an experimental study," Discussion Paper Series in Economics 17/2015, Norwegian School of Economics, Department of Economics.
    15. Wulf Gaertner & Lars Schwettmann, 2017. "Burden sharing in deficit countries: a questionnaire-experimental investigation," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(2), pages 113-144, June.
    16. Simon Gächter & Arno Riedl, 2006. "Dividing Justly in Bargaining Problems with Claims," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 27(3), pages 571-594, December.
    17. José M. Jiménez Gómez, 2010. "Noncooperative justifications for old bankruptcy rules," Working Papers. Serie AD 2010-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item

    Keywords

    Claims problems; Proportional rule; Experimental Economics;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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