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What’s ours is ours: An experiment on the efficiency of bargaining over the fruits of joint activity

Author

Listed:
  • Lian Xue

    (Wuhan University)

  • Stefania Sitzia

    (University of East Anglia)

  • Theodore L. Turocy

    (University of East Anglia)

Abstract

We use experimental methods to test the effects of joint endowment on coordination success in tacit bargaining games. It has been well established that people use existing focal points to facilitate coordination and the power of such cues declines as payoff becomes increasingly unequal. We conducted an experiment in which two players jointly engaged in an interactive team building activity and together earned the stakes over which they bargain. In the team building exercise, two players jointly complete a shortest route task in a metaphor of a treasure hunt. After the two treasure hunters complete the journey, they independently decide how to divide their rewards using a tacit bargaining table. We find that when participants bargain over the fruits that result from joint activity, they are more likely to coordinate the focal point equilibrium.

Suggested Citation

  • Lian Xue & Stefania Sitzia & Theodore L. Turocy, 2017. "What’s ours is ours: An experiment on the efficiency of bargaining over the fruits of joint activity," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-12, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:wcbess:17-12
    as

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    References listed on IDEAS

    as
    1. Bacharach, Michael, 1999. "Interactive team reasoning: A contribution to the theory of co-operation," Research in Economics, Elsevier, vol. 53(2), pages 117-147, June.
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    More about this item

    Keywords

    Team building; Joint production; Group identity; Tacit bargaining; Focal point;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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