Fairness vs. Simplicity in Appointment Rules

Matias Nunez, Danilo Coelho, Carlos Alós-Ferrera and Salvador Barberà

No 1490, Working Papers from Barcelona School of Economics

Abstract: Arbitrators for high-stakes conflicts, as well as judges and other officials, are of- ten appointed through structured bargaining protocols. The theoretical literature models these protocols as extensive-form games with perfect information, evaluating them based on the merits of their subgame-perfect equilibria, such as efficiency. However, decision makers often fail to implement backward induction and exhibit other-regarding preferences. In a large experiment, we compare two prominent protocols and show that those concerns affect outcomes. Bargaining protocols whose equilibria are unfair (in a maximin sense) fare poorly compared to those favoring compromises. However, lengthy protocols face limitations because they elicit non-equilibrium behavior.

Keywords: bargaining; fairness; backward induction; Appointment rules (search for similar items in EconPapers)
JEL-codes: C78 C92 D63 D74 D82 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-des, nep-exp, nep-gth and nep-law
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