Focal Points in Experimental Bargaining Games

The experimental literature on bargaining games is vast and growing. The common thread is the investigation of games in which bargainers reach an agreement that results in some allocation of resources between them. Unlike real-world bargaining, in which negotiations are often multi-dimensional and therefore rather complex, in most experiments outcomes are defined in terms of monetary payoffs to the bargainers, providing participants with real incentives to pursue their interests in a way that is intelligible to researchers. Beyond the major and subtle differences between specific bargaining protocols, most experimental bargaining games have in common the most distinctive feature of bargaining: the multiplicity of alternative agreements (including the possibility of disagreement). The bargainers typically have conflicting preferences over alternative agreements, but a common interest in avoiding costly disagreement. This multiplicity of conflicting alternatives will be the focus of this chapter.