American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Bargaining in the Shadow of Uncertainty
American Economic Journal: Microeconomics
vol. 16,
no. 4, November 2024
(pp. 229–58)
Abstract
In bargaining environments with stochastic future surplus, failing to delay agreement can be inefficient when the expected future surplus is sufficiently high. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule. Using a laboratory experiment, we find support for these predictions, both when the unanimity rule is predicted to be more efficient and when there should be no difference between the two rules. We also find large point prediction deviations under the majority rule. We show these deviations can be explained by higher-than-predicted egalitarian sharing and a lower risk of being excluded from future agreements.Citation
Agranov, Marina, Hülya Eraslan, and Chloe Tergiman. 2024. "Bargaining in the Shadow of Uncertainty." American Economic Journal: Microeconomics, 16 (4): 229–58. DOI: 10.1257/mic.20220327Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- C92 Design of Experiments: Laboratory, Group Behavior
- D71 Social Choice; Clubs; Committees; Associations
- D81 Criteria for Decision-Making under Risk and Uncertainty
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