How robust is the equal split? Transferable utility and three-person bargaining in the laboratory

Noemí Navarro () and Róbert F. Veszteg
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Noemí Navarro: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Róbert F. Veszteg: Waseda University [Tokyo, Japan]

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Abstract: This paper investigates the robustness of equal-split outcomes in unstructured bargaining environments, expanding on classic two-person settings to include payoff transfers and multi-party bargaining. Drawing from experimental data, we find that equal splits persist as a focal solution in two-person bargaining with payoff transfers, even when some potential efficiency gains are left unexploited, likely due to limitations in participants' cognitive and strategic sophistication. In three-person settings (without payoff transfers), while agreements align closely with equality, they tend to do so only as long as efficiency and stability criteria are met. Our results suggest that bargaining parties prioritize equality when efficient solutions are complicated to find, but prioritize efficiency when efficient solutions are easily accessible. Also, in multilateral bargaining, coalitional stability becomes a primary concern, whereas it remains a softer constraint in simpler, bilateral negotiations.

Keywords: Economics; Multilateral bargaining; Experiments; Nash bargaining solution; Equal-split solution; Individual rationality; Microeconomics; Robustness (evolution); Sophistication; Stochastic game; Negotiation; Bilateral bargaining (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-exp, nep-gth and nep-upt
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Published in Journal of Economic Inequality, 2025, ⟨10.1007/s10888-025-09694-5⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05240606

DOI: 10.1007/s10888-025-09694-5

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