Experiments in Majoritarian Bargaining

Summary

We investigate the predictive success of the Baron-Ferejohn model of legislative bargaining in laboratory environments. In particular, we use a finite period version of the bargaining game under weighted majority rule where a fixed payoff is divided between three players. We find that our subjects’ behavior is not predicted well by the Baron-Ferejohn model. The model predicts hardly better than a coin flip which coalition partner is selected by the chosen proposer, and proposers allocate more money to other players than predicted. A sizable number of proposals are rejected in the first proposal periods, and subjects who vote to reject a proposal on average receive a higher payoff from the new proposal. We find that a simple equal sharing rule yields point predictions that can account for 2/1 to 4/3 of all accepted proposals.

Support from Stanford University’s Graduate School of Business and the Dispute Research and Resolution Center at the Kellogg School of Management, Northwestern University, is gratefully acknowledged. Earlier versions of this paper were presented at the Annual Meeting of the Allied Social Sciences Association, the Annual Meetings of the American Political Science Association, the Economic Science Association, and the Political Science Department at Columbia University. We appreciate the diligent assistance of Kristin Kanthak in administering the laboratory experiments and helpful comments from Jonathan Bendor, Richard Boylan, Randy Calvert, Charles Cameron, Yan Chen, John Duggan, Catherine Hafer, Nolan McCarty, the late Richard McKelvey, Thomas Palfrey, Thomas Rietz, Roberto Weber, and Rick Wilson. All errors are our own.