Browsing by Subject "Distribution games"

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    Bargaining games with joint production
    (Oxford University Press, 2012) Karagözoğlu, Emin; Croson, R.; Bolton, G. E.
    This article outlines the literature on experimental bargaining and distribution games with joint production. The analysis of aggregate behavior strongly rejects game theoretical predictions and shows that at least some subjects behave in line with equity-based considerations. The influence of fairness judgments on bargaining behavior is stronger when there is randomness in the production process. Power distribution seems to affect fairness judgments. It is noted that knowing the focal point provides a better forecast of outcomes than knowing whether there is hard leverage. Many joint production processes involve complementarities. The length of the relationship (e.g., short-term vs. long-term) may affect the fairness judgments and hence the bargaining. Improving the strategy space in bargaining experiments by allowing free-form negotiation and communication seems to be a promising step forward.