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Decentralized or collective bargaining in a strategy experiment

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  • Berninghaus, Siegfried
  • Güth, Werner
  • Keser, Claudia

Abstract

We present an experiment where two players bargain with a third player. They can bargain either separately or form a joint venture to bargain collectively. Our theoretical benchmark solution predicts decentralized bargaining, as only one player has an interest in forming a joint venture. However, we observe a significant amount of collective bargaining. Collective bargaining, when compared with decentralized bargaining, has no significant effect on the payoffs of the players in the joint venture but reduces the payoff of the third player.

Suggested Citation

  • Berninghaus, Siegfried & Güth, Werner & Keser, Claudia, 1999. "Decentralized or collective bargaining in a strategy experiment," SFB 373 Discussion Papers 1999,90, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    • Handle: RePEc:zbw:sfb373:199990
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    References listed on IDEAS

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    More about this item

    Keywords

    Bargaining; Joint Venture; Merger; Experiments; Equilibrium Selection;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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