 Multilateral Bargaining with Proposer Selection ContestDuk Gyoo Kim and Sang-Hyun Kim No 2020rwp-168, Working papers from Yonsei University, Yonsei Economics Research Institute Abstract: This study investigates the competition to be selected as the proposer in a subsequent multilateral bargaining game experimentally. The experimental environment varies in two dimensions: reservation payoffs (homogeneous or heterogeneous) and information on the extent of each subject’s investment in the competition (public or private). The proposer’s share was significantly lower than what theory predicts, and with taking into account the proposer’s partial rent extraction, subjects over-invest to increase their chances of winning the right of proposal. More importantly, we find that inefficiency (due to the levels of spending) and inequality go hand in hand; the surplus was distributed most efficiently and most equally when the reservation payoffs were heterogeneous, and subjects were informed of who had spent how much in the competition. The proportion of proposals being rejected was smaller in public treatments than in private treatments. This study contributes to the literature by identifying formal rules that are more effective in establishing efficient informal norms. Keywords: Multilateral bargaining; Contest; Public choice; Laboratory experiments (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:yon:wpaper:2020rwp-168 Access Statistics for this paper More papers in Working papers from Yonsei University, Yonsei Economics Research Institute Contact information at EDIRC. |
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