09:30 - 11:00
Parallel track
Room: UCK, Room 114
Multilateral Bargaining on a Loss Domain
Duk Gyoo Kim 1, Wooyoung Lim 2
1 University of Mannheim, Mannheim
2 Hong Kong University of Science and Technology, Clear Water Bay

Many-player divide-the-dollar games have been a workhorse for theoretical and experimental analysis on multilateral bargaining. If we deal with a loss, that is, if we consider many-player ``divide-the-penalty" games for location choices of obnoxious facilities, allocation of burdensome chores, and climate change summit to reduce carbon dioxide emissions, the theoretical predictions do not merely have flipped signs of those in the divide-the-dollar games. We show that the stationary subgame perfect equilibrium (SSPE) is no longer unique in payoffs. The most ``egalitarian" equilibrium among the stationary equilibria is mirror-imaged to the unique SSPE in the Baron-Ferejohn model. That equilibrium is fragile in the sense that allocations are sensitively responding to the changes in parameters while the most ``unequal" equilibrium is not affected by the changes in parameters. Experimental evidence clearly support the most unequal equilibrium: Most of approved proposals under a majority rule involve an extreme allocation of the loss to a few members.


Reference:
Fr-Bargaining-2
Session:
Bargaining
Presenter/s:
Duk Gyoo Kim
Room:
UCK, Room 114
Date:
Friday, 3 May
Time:
09:30 - 11:00
Session times:
09:30 - 11:00