What’s ours is ours: An experiment on the efficiency of bargaining over the fruits of joint activity

Lian Xue, Stefania Sitzia and Theodore Turocy
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Lian Xue: Wuhan University
Stefania Sitzia: University of East Anglia

No 17-12, Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) from School of Economics, University of East Anglia, Norwich, UK.

Abstract: We use experimental methods to test the effects of joint endowment on coordination success in tacit bargaining games. It has been well established that people use existing focal points to facilitate coordination and the power of such cues declines as payoff becomes increasingly unequal. We conducted an experiment in which two players jointly engaged in an interactive team building activity and together earned the stakes over which they bargain. In the team building exercise, two players jointly complete a shortest route task in a metaphor of a treasure hunt. After the two treasure hunters complete the journey, they independently decide how to divide their rewards using a tacit bargaining table. We find that when participants bargain over the fruits that result from joint activity, they are more likely to coordinate the focal point equilibrium.

Keywords: Team building; Joint production; Group identity; Tacit bargaining; Focal point (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 (search for similar items in EconPapers)
Date: 2017-11-27
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-gth
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