An Experimental Analysis of Asymmetric Power in Conflict Bargaining

Katri Sieberg, David Clark, Charles Holt, Timothy Nordstrom and William Reed
Additional contact information
Katri Sieberg: School of Social Science and Humanities, FIN-33014 University of Tampere, Finland
David Clark: Department of Political Science, Binghamton University (SUNY), Binghamton, NY 13902, USA
Timothy Nordstrom: Department of Political Science, The University of Mississippi, Oxford, MS 38677, USA
William Reed: Department of Government & Politics, University of Maryland, 3140 Tydings Hall, College Park, MD 20742, USA

Games, 2013, vol. 4, issue 3, 1-23

Abstract: Demands and concessions in a multi-stage bargaining process are shaped by the probabilities that each side will prevail in an impasse. Standard game-theoretic predictions are quite sharp: demands are pushed to the precipice with nothing left on the table, but there is no conflict regardless of the degree of power asymmetry. Indeed, there is no delay in reaching an agreement that incorporates the (unrealized) costs of delay and conflict. A laboratory experiment has been used to investigate the effects of power asymmetries on conflict rates in a two-stage bargaining game that is (if necessary) followed by conflict with a random outcome. Observed demands at each stage are significantly correlated with power, as measured by the probability of winning in the event of disagreement. Demand patterns, however, are flatter than theoretical predictions, and conflict occurs in a significant proportion of the interactions, regardless of the degree of the power asymmetry. To address these deviations from the standard game-theoretic predictions, we also estimated a logit quantal response model, which generated the qualitative patterns that are observed in the data. This one-parameter generalization of the Nash equilibrium permits a deconstruction of the strategic incentives that cause demands to be less responsive to power asymmetries than Nash predictions.

Keywords: bargaining; conflict; quantal response equilibrium; laboratory experiments (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/2073-4336/4/3/375/pdf (application/pdf)
https://www.mdpi.com/2073-4336/4/3/375/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jgames:v:4:y:2013:i:3:p:375-397:d:27697

Access Statistics for this article

Games is currently edited by Ms. Susie Huang

More articles in Games from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().