Bargaining power does not matter when sharing losses – Experimental evidence of equal split in the Nash bargaining game

Eike Kroll, Ralf Morgenstern, Thomas Neumann, Stephan Schosser and Bodo Vogt

Journal of Economic Behavior & Organization, 2014, vol. 108, issue C, 261-272

Abstract: While experimental research on social dilemmas focuses on the distribution of gains, we analyze social preferences in the case of losses. In this experimental study, the participants share a loss in a Nash bargaining game, but waiting time, instead of monetary losses, serves as an incentive. Further, we assume that the participants prefer less, rather than more, waiting time. Our experiment consists of four versions of the Nash bargaining game to allow for a comparison of four classical negotiation concepts (Nash, equal loss, equal gain, and Kalai–Smorodinsky) and an equal split of the overall waiting time. Our experimental evidence shows that an equal split better predicts the outcome of a Nash bargaining game involving losses than classical concepts do. Furthermore, the findings support that the participants resort to equal splits at the cost of their overall welfare.

Keywords: Bargaining; Losses; Equal split; Experimental economics (search for similar items in EconPapers)
JEL-codes: C7 C9 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:108:y:2014:i:c:p:261-272

DOI: 10.1016/j.jebo.2014.10.009

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