Dividing Justly in Bargaining Problems with Claims: Normative Judgments and Actual Negotiations

Simon Gächter and Arno Riedl

No 1375, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Theoretical research on claims problems has concentrated on normative properties and axiomatizations of solution concepts. We complement these analyses by empirical evidence on the predictability of three classical solution concepts in a bankruptcy problem. We examine both people's impartial normative evaluations as well as their actual negotiation behavior in a bargaining with claims environment. We measure people's judgments on the normative attractiveness of solution concepts with the help of a survey and also observe actual agreements in a bargaining experiment with real money at stake. We find that the proportional solution is the normatively most attractive rule, whereas actual negotiation agreements are closest to the 'constrained equal award' solution.

Keywords: laboratory experiment; bankruptcy problems with claims; proportional rule; equal-awards rule; equallosses rule; fairness; vignette (search for similar items in EconPapers)
JEL-codes: C78 C92 D63 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-10
New Economics Papers: this item is included in nep-bec and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Social Choice and Welfare, 2006, 27, 571-594

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