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The pizza night game: Conflict of interest and payoff inequality in tacit bargaining games with focal points

Andrea Isoni, Robert Sugden and Jiwei Zheng

European Economic Review, 2020, vol. 127, issue C

Abstract: We report the results of a new tacit bargaining experiment that provides two key insights about the effects of payoff inequality on coordination and cooperation towards efficient outcomes. The experiment features the novel Pizza Night game, which can disentangle the effects of payoff inequality and conflict of interest. When coordination relies on focal points based on labelling properties, payoff inequality does not interfere with the successful use of those properties. When there are efficiency cues that assist coordination, payoff inequality is not an obstacle to the maximisation of efficiency. Conflict of interest is the main barrier to successful coordination.

Keywords: Pizza night game; Tacit bargaining; Conflict of interest; Payoff inequality; Focal points (search for similar items in EconPapers)
JEL-codes: C72 C78 C91 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.euroecorev.2020.103428

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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