Self-Selecting Random or Cumulative Pay? A Bargaining Experiment

Arianna Galliera

No 2/2016, Working Papers CESARE from Dipartimento di Economia e Finanza, LUISS Guido Carli

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.

Keywords: bargaining; experiment; gender; payment scheme. (search for similar items in EconPapers)
JEL-codes: C78 C91 D82 J16 J33 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-exp, nep-gth and nep-hrm
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Journal Article: Self-selecting random or cumulative pay? A bargaining experiment (2018)
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