On the Adjudication of Conflicting Claims: An Experimental Study

Carmen Herrero (), Juan Moreno-Ternero and Giovanni Ponti ()

No 2009-5, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

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.

Keywords: Claims problems; Proportional rule; Experimental Economics (search for similar items in EconPapers)
JEL-codes: C91 D63 D74 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2009-11
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://theeconomics.uma.es/malagawpseries/Papers/METCwp2009-5.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: On the adjudication of conflicting claims: an experimental study (2010)
Working Paper: On the adjudication of conflicting claims: an experimental study (2010)
Journal Article: On the adjudication of conflicting claims: an experimental study (2009)
Working Paper: On the Adjudication of Conflicting Claims: An Experimental Study (2009)
Working Paper: On the adjudication of conflicting claims: an experimental study (2006)
Working Paper: On the Adjudication of Conflicting Claims: An Experimental Study (2004)
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