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: Université de Rennes, CNRS
Róbert F. Veszteg: Waseda University, School of Political Science and Economics

The Journal of Economic Inequality, 2025, vol. 23, issue 3, No 13, 909-931

Abstract: 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: Bilateral bargaining; Multilateral bargaining; Experiments; Nash bargaining solution; Equal-split solution; Individual rationality (search for similar items in EconPapers)
JEL-codes: C78 C91 D63 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10888-025-09694-5

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