Two Person Bargaining Mechanisms: A Laboratory Experiment

Damien Bol, Jean-François Laslier and Matias Nuñez
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Damien Bol: King’s College London

Group Decision and Negotiation, 2022, vol. 31, issue 6, No 3, 1145-1177

Abstract: Abstract We conduct a series of experiments in which two subjects bargain over five options. Following an experimental design closely related to De Clippel et al. (Am Econ Rev 104:3434–3458, 2014), we evaluate the performance of three bargaining mechanisms: (α) one subject shortlists a block of three options before the other chooses one among them, ( $$\beta$$ β ) both subjects veto options simultaneously and in a block, and ( $$\gamma$$ γ ) both subjects veto options simultaneously and gradually one after the other. We document that the non-symmetric shortlisting mechanism (α) is highly efficient, but our data also suggest the existence of a first-mover advantage as subjects become more experienced. The simultaneous mechanism ( $$\beta$$ β ) is less efficient than (α) and generates a high level of ex-post inequality. The gradual veto mechanism ( $$\gamma$$ γ ) is no less efficient than (α), but has the important advantage of shutting down the possibility of any first-mover advantage.

Keywords: Experiments; Consensus; Inequality; Bargaining (search for similar items in EconPapers)
JEL-codes: C78 D7 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10726-022-09793-y

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