Bargaining in the Shadow of Uncertainty

We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies ne...

Full description

Saved in:
Bibliographic Details
Published in:NBER Working Paper Series 2022-09
Main Authors: Agranov, Marina, Eraslan, Hülya, Tergiman, Chloe
Format: Article
Language:English
Subjects:
Agreements
Bargaining
Debt restructuring
Design
Economic theory
Experiments
Majority rule
Sovereign debt
State laws
Stochastic models
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
cited_by
cites
container_end_page
container_issue
container_start_page
container_title NBER Working Paper Series
container_volume
creator Agranov, Marina
Eraslan, Hülya
Tergiman, Chloe
description We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule as players try to avoid endogenous risk of being excluded from the winning coalitions in the future. We find strong support for this prediction both when the unanimity rule is predicted to lead to more delays, and when both rules should lead to identical levels of delays. We also find that there are more delays than predicted under the majority rule. Using data from conversations among the bargainers and the type of proposals that are implemented, we find that these deviations arise as a result of more egalitarian sharing than predicted by theory, and therefore, lower risk of being excluded from the winning coalitions in the future.
doi_str_mv 10.3386/w30434
format article
fullrecord <record><control><sourceid>proquest</sourceid><recordid>TN_cdi_proquest_journals_2712860078</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>2712860078</sourcerecordid><originalsourceid>FETCH-LOGICAL-n478-72d50578eaed8eb114a5b153be3f9edd8b6d93b297cd75dce59c3e1c7b2cd17d3</originalsourceid><addsrcrecordid>eNotjU1LAzEQQHNQsFb9DQEPnlaTzGZnctTiFxQ8WM8lycy2WySru1uK_96Cnt7hwXtKXVlzC0DN3QFMDfWJmhkKVLkAeKbOx3FnjCMydqZuHuKwiV3pykZ3RU9b0e_byP1B963-KFmG6Winnwt12sbPUS7_OVerp8fV4qVavj2_Lu6XVamRKnTsjUeSKEySrK2jT9ZDEmiDMFNqOEByATOj5yw-ZBCbMbnMFhnm6vov-zX033sZp_Wu3w_leFw7tI4aY5DgFwpkPpU</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>2712860078</pqid></control><display><type>article</type><title>Bargaining in the Shadow of Uncertainty</title><source>ABI/INFORM Global</source><source>Alma/SFX Local Collection</source><creator>Agranov, Marina ; Eraslan, Hülya ; Tergiman, Chloe</creator><creatorcontrib>Agranov, Marina ; Eraslan, Hülya ; Tergiman, Chloe</creatorcontrib><description>We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule as players try to avoid endogenous risk of being excluded from the winning coalitions in the future. We find strong support for this prediction both when the unanimity rule is predicted to lead to more delays, and when both rules should lead to identical levels of delays. We also find that there are more delays than predicted under the majority rule. Using data from conversations among the bargainers and the type of proposals that are implemented, we find that these deviations arise as a result of more egalitarian sharing than predicted by theory, and therefore, lower risk of being excluded from the winning coalitions in the future.</description><identifier>ISSN: 0898-2937</identifier><identifier>DOI: 10.3386/w30434</identifier><language>eng</language><publisher>Cambridge: National Bureau of Economic Research, Inc</publisher><subject>Agreements ; Bargaining ; Debt restructuring ; Design ; Economic theory ; Experiments ; Majority rule ; Sovereign debt ; State laws ; Stochastic models</subject><ispartof>NBER Working Paper Series, 2022-09</ispartof><rights>Copyright National Bureau of Economic Research, Inc. Sep 2022</rights><woscitedreferencessubscribed>false</woscitedreferencessubscribed></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.proquest.com/docview/2712860078?pq-origsite=primo$$EHTML$$P50$$Gproquest$$H</linktohtml><link.rule.ids>780,784,11688,27925,36060,44363</link.rule.ids></links><search><creatorcontrib>Agranov, Marina</creatorcontrib><creatorcontrib>Eraslan, Hülya</creatorcontrib><creatorcontrib>Tergiman, Chloe</creatorcontrib><title>Bargaining in the Shadow of Uncertainty</title><title>NBER Working Paper Series</title><description>We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule as players try to avoid endogenous risk of being excluded from the winning coalitions in the future. We find strong support for this prediction both when the unanimity rule is predicted to lead to more delays, and when both rules should lead to identical levels of delays. We also find that there are more delays than predicted under the majority rule. Using data from conversations among the bargainers and the type of proposals that are implemented, we find that these deviations arise as a result of more egalitarian sharing than predicted by theory, and therefore, lower risk of being excluded from the winning coalitions in the future.</description><subject>Agreements</subject><subject>Bargaining</subject><subject>Debt restructuring</subject><subject>Design</subject><subject>Economic theory</subject><subject>Experiments</subject><subject>Majority rule</subject><subject>Sovereign debt</subject><subject>State laws</subject><subject>Stochastic models</subject><issn>0898-2937</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2022</creationdate><recordtype>article</recordtype><sourceid>M0C</sourceid><recordid>eNotjU1LAzEQQHNQsFb9DQEPnlaTzGZnctTiFxQ8WM8lycy2WySru1uK_96Cnt7hwXtKXVlzC0DN3QFMDfWJmhkKVLkAeKbOx3FnjCMydqZuHuKwiV3pykZ3RU9b0e_byP1B963-KFmG6Winnwt12sbPUS7_OVerp8fV4qVavj2_Lu6XVamRKnTsjUeSKEySrK2jT9ZDEmiDMFNqOEByATOj5yw-ZBCbMbnMFhnm6vov-zX033sZp_Wu3w_leFw7tI4aY5DgFwpkPpU</recordid><startdate>20220901</startdate><enddate>20220901</enddate><creator>Agranov, Marina</creator><creator>Eraslan, Hülya</creator><creator>Tergiman, Chloe</creator><general>National Bureau of Economic Research, Inc</general><scope>3V.</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>87Z</scope><scope>8FK</scope><scope>8FL</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FRNLG</scope><scope>F~G</scope><scope>K60</scope><scope>K6~</scope><scope>L.-</scope><scope>M0C</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope></search><sort><creationdate>20220901</creationdate><title>Bargaining in the Shadow of Uncertainty</title><author>Agranov, Marina ; Eraslan, Hülya ; Tergiman, Chloe</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-n478-72d50578eaed8eb114a5b153be3f9edd8b6d93b297cd75dce59c3e1c7b2cd17d3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2022</creationdate><topic>Agreements</topic><topic>Bargaining</topic><topic>Debt restructuring</topic><topic>Design</topic><topic>Economic theory</topic><topic>Experiments</topic><topic>Majority rule</topic><topic>Sovereign debt</topic><topic>State laws</topic><topic>Stochastic models</topic><toplevel>online_resources</toplevel><creatorcontrib>Agranov, Marina</creatorcontrib><creatorcontrib>Eraslan, Hülya</creatorcontrib><creatorcontrib>Tergiman, Chloe</creatorcontrib><collection>ProQuest Central (Corporate)</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ABI/INFORM Collection</collection><collection>ProQuest Central (Alumni) (purchase pre-March 2016)</collection><collection>ABI/INFORM Collection (Alumni Edition)</collection><collection>ProQuest Central (Alumni)</collection><collection>ProQuest Central</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>Business Premium Collection (Alumni)</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Business Collection (Alumni Edition)</collection><collection>ProQuest Business Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Global</collection><collection>One Business (ProQuest)</collection><collection>ProQuest One Business (Alumni)</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Agranov, Marina</au><au>Eraslan, Hülya</au><au>Tergiman, Chloe</au><format>book</format><genre>document</genre><ristype>GEN</ristype><atitle>Bargaining in the Shadow of Uncertainty</atitle><jtitle>NBER Working Paper Series</jtitle><date>2022-09-01</date><risdate>2022</risdate><issn>0898-2937</issn><abstract>We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule as players try to avoid endogenous risk of being excluded from the winning coalitions in the future. We find strong support for this prediction both when the unanimity rule is predicted to lead to more delays, and when both rules should lead to identical levels of delays. We also find that there are more delays than predicted under the majority rule. Using data from conversations among the bargainers and the type of proposals that are implemented, we find that these deviations arise as a result of more egalitarian sharing than predicted by theory, and therefore, lower risk of being excluded from the winning coalitions in the future.</abstract><cop>Cambridge</cop><pub>National Bureau of Economic Research, Inc</pub><doi>10.3386/w30434</doi></addata></record>
fulltext fulltext
identifier ISSN: 0898-2937
ispartof NBER Working Paper Series, 2022-09
issn 0898-2937
language eng
recordid cdi_proquest_journals_2712860078
source ABI/INFORM Global; Alma/SFX Local Collection
subjects Agreements
Bargaining
Debt restructuring
Design
Economic theory
Experiments
Majority rule
Sovereign debt
State laws
Stochastic models
title Bargaining in the Shadow of Uncertainty
url http://sfxeu10.hosted.exlibrisgroup.com/loughborough?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2024-12-28T23%3A37%3A17IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest&rft_val_fmt=info:ofi/fmt:kev:mtx:book&rft.genre=document&rft.atitle=Bargaining%20in%20the%20Shadow%20of%20Uncertainty&rft.jtitle=NBER%20Working%20Paper%20Series&rft.au=Agranov,%20Marina&rft.date=2022-09-01&rft.issn=0898-2937&rft_id=info:doi/10.3386/w30434&rft_dat=%3Cproquest%3E2712860078%3C/proquest%3E%3Cgrp_id%3Ecdi_FETCH-LOGICAL-n478-72d50578eaed8eb114a5b153be3f9edd8b6d93b297cd75dce59c3e1c7b2cd17d3%3C/grp_id%3E%3Coa%3E%3C/oa%3E%3Curl%3E%3C/url%3E&rft_id=info:oai/&rft_pqid=2712860078&rft_id=info:pmid/&rfr_iscdi=true