Bargaining in a Video Experiment: Determinants of Boundedly by Heike Hennig-Schmidt

By Heike Hennig-Schmidt

Bilateral bargaining occasions are of significant significance in truth. conventional microeconomics, even though, make cognitive and motivational assumptions of topics` complete rationality which are printed as being unrealistic by means of an increasing number of experimental investigations. the current ebook provides an immense contribution to the certainty of ideas of boundedly rational habit by means of at once staring at teams of topics in a choice state of affairs and videotaping their discussions. an important results of the ebook is that the habit of topics is guided by way of aspirations concerning the ultimate consequence. the degrees of aspirations are motivated by means of prominence and assorted different types of the fairness precept leading to a number of equity norms as to the allocation of the amount of cash to be divided. one other very important characteristic of the publication stems from the research of holiday off discussions and allows a motivational rationalization of the emergence of breakdowns in bargaining.

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The same is true if we calculate the prominence level for all proposals. The prominence level of all W-groups' proposals in terms of payoffs for group 1 is 10. 4: Determination of the prominence level of all S-groups' proposals Cumulative number of Number of Cumulative distributions M(ll) H(ll) 19 40 47 75 109 148 192 0,019 0,037 0,074 0,204 0,315 0,444 0,778 0,092 0,193 0,227 0,362 0,527 0,715 0,928 207 1,000 1,000 Prominence levelll Values m(ll) Observations Values Observations h(ll) M(ll) H(ll) 250 200 25 20 10 5 2 1 1 2 7 6 7 18 19 21 7 28 34 39 44 1 2 4 11 17 24 42 1 12 15 54 A1 I i Surplus D(ll) 0,073 0,156 0,153 0,159 0,212 0,271 0,150 0,000 It seems to be important, however, that the procedure proposed by Selten (1987) to determine the prominence level is applied to a sufficiently large data set.

In our experiment allocations that are based on the equity principle are intensely discussed and proposed. Most often they are justified by fairness considerations. Groups do not always use the term fairness. They also characterize these allocations as "acceptable, appropriate, comprehensible, ideal, just, justified, legitimate, logical, moral, morally most indisputable, optimal, plausible, rational, realistic, reasonable, satisfactory, an incentive for both parties to agree, a reasonable compromise, the optimum".

1 10. 2. Payoffs 41 How can this finding be explained? Groups obviously did not behave as hypothesized above. On the one hand groups carryover their experience from 1- to E-sessions, and each group refers to experience in I-sessions. 4o On the other hand we found that groups show a typical behavior that is maintained in E-sessions. They behave according to the status they have: S-groups bargain for high payoffs, W-groups try to keep the payoff as near as possible to the Equal Split. There are several groups that would not have come to an agreement had they played against themselves 41 .

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