Equal Splits or Product Prices: An Experiment

Hakan J Holm () and Emma Svensson

No 2011:16, Working Papers from Lund University, Department of Economics

Abstract: This paper compares the choice of focal points in a Nash Demand Game embedded in an abstract frame with the corresponding choices in a game with a real product frame where parties bargain for a well-known consumer product. We find that the frame has a substantial impact on the fraction of subjects choosing the equal split outcome casting doubt on the robustness of this solution in bargaining over real goods. The paper shows that there is notable heterogeneity among subjects with regard to their choices of focal points and reports individual characteristics predicting these choices.

Keywords: focal points; Nash Demand Game; heterogeneity; framing; equilibrium selection (search for similar items in EconPapers)
JEL-codes: C91 D03 D84 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2011-05-02, Revised 2013-04-22
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:lunewp:2011_016

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