Efficiency versus Equality in Bargaining
Galeotti, Fabio, Montero, Maria and Poulsen, Anders (2019) Efficiency versus Equality in Bargaining. Journal of the European Economic Association, 17 (6). 1941–1970. ISSN 1542-4766
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Abstract
We consider how the outcome of bargaining varies with changes in the trade-off between equality, efficiency, and total-earnings maximization. We observe that subjects avoid an equal-earnings outcome if it is Pareto inefficient; a large proportion of bargaining pairs avoid an equal and Pareto efficient outcome in favor of one giving unequal and total-earnings maximizing payoffs, and this proportion increases when unequal outcomes imply larger earnings to one of the players, even though this also implies higher inequality; finally, we document a compromise effect that violates the independence of irrelevant alternatives condition.
Item Type: | Article |
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Uncontrolled Keywords: | bargaining,efficiency,equality,communication,experiment,independence of irrelevant alternatives |
Faculty \ School: | Faculty of Social Sciences > School of Economics |
Related URLs: | |
Depositing User: | Pure Connector |
Date Deposited: | 12 Mar 2018 10:30 |
Last Modified: | 08 Jan 2021 00:51 |
URI: | https://ueaeprints.uea.ac.uk/id/eprint/66465 |
DOI: | 10.1093/jeea/jvy030 |
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