Concession Bargaining

We test experimentally whether dynamic interaction is crucial for concession bargaining. In our complete information bargaining experiments, two parties with asymmetric conflict payoffs try to agree how to share a commonly known pie by bargaining over a finite number of successive trials (agreement attempts). We compare the fully dynamic interaction to one less dynamic and one static protocol. In the quasi-dynamic protocol, later trials merely reveal that so far no agreement has been reached, and in the static protocol, no feedback information is given about earlier trials. We find that neither conflict rate nor efficiency or inequality of agreements differs across protocols. Comparing different numbers of maximal trials shows that more trials render conflict more likely due to less concessions.

Voluntary Contributions and Collective Redistribution

I study a multilateral bargaining game in which committee members invest in a common project prior to redistributing the total value of production. The game corresponds to a Baron and Ferejohn (1989) legislative bargaining model preceded by a production stage that is similar to a voluntary contribution mechanism. In this game, contributions reach almost full efficiency in a random rematching experimental design. Bargaining outcomes tend to follow an equity standard of proportionality: higher contributors obtain higher shares. Unlike other bargaining experiments with an exogenous fund, allocations involving payments to all members are modal instead of minimum winning coalitions, and proposer power is quite low. (JEL C78, D63, D71, D72, H41)

Institutions and information in multilateral bargaining experiments

This paper examines the behavior in multilateral bargaining experiments with alternating offers and asymmetric information. In all experiments, a single buyer has up to ten bargaining periods to purchase one unit of a good from each of two sellers. Treatments vary based on who makes the first offer (buyer or sellers), timing (consistent buyer-offer/sellers-demand or alternating), and information (buyer’s value and sellers’ costs are known or come from a uniform distribution). We find that actual bargaining outcomes are virtually identical when offers alternate, regardless of which player makes the first offer. We find that alternating offers reduce bargaining delay slightly compared to treatments in which one side or the other makes repeated take-it-or-leave-it offers. Finally, we find that incomplete information increases bargaining delay and the likelihood of failed agreements.