Social Choice and Welfare

, Volume 34, Issue 1, pp 145–179 | Cite as

On the adjudication of conflicting claims: an experimental study

  • Carmen Herrero
  • Juan D. Moreno-Ternero
  • Giovanni PontiEmail author
Original Paper


This paper reports an experimental study on three well-known solutions for problems of adjudicating conflicting claims: the constrained equal awards, the proportional, and the constrained equal losses rules. We first let subjects play three games designed such that the unique equilibrium allocation coincides with the recommendation of one of these three rules. In addition, we let subjects play an additional game that has the property that all (and only) strategy profiles in which players coordinate on the same rule constitute a strict Nash equilibrium. While in the first three games subjects’ play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device, especially when we frame the game as an hypothetical bankruptcy situation. We also administered a questionnaire to a different group of students, asking them to act as impartial arbitrators to solve (among others) the same problems played in the lab. Also in this case, respondents were sensitive to the framing of the questions, but the proportional rule was selected by the vast majority of respondents.


Nash Equilibrium Initial Endowment Payoff Matrice Proportional Rule Bankruptcy Problem 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Aumann RJ, Maschler M (1985) Game theoretic analysis of a bankruptcy problem from the Talmud. J Econ Theory 36: 195–213CrossRefGoogle Scholar
  2. Ashenfelter O, Bloom DE (1984) Models of arbitrator behavior: theory and evidence. Am Econ Rev 74: 111–124Google Scholar
  3. Ashenfelter O, Currie J, Farber HS, Spiegel M (1992) An experimental comparison of dispute rates in alternative arbitration systems. Econometrica 60: 1407–1433CrossRefGoogle Scholar
  4. Bar-Hillel M, Yaari M (1993) Judgments of distributive justice. In: Mellers B, Baron J (eds) Psychological perspectives on justice: theory and applications. Cambridge University Press, New YorkGoogle Scholar
  5. Binmore K, Osborne M, Rubinstein A (1992) Noncooperative models of bargaining. In: Aumann R, Hart S (eds) Handbook of game theory I. North-Holland, AmsterdamGoogle Scholar
  6. Binmore K (1998) Game theory and the social contract, vol II: Just playing. MIT Press, CambridgeGoogle Scholar
  7. Bosmans K, Schokkaert E (2007) Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions. CORE Discussion Paper 2007/30Google Scholar
  8. Cuadras-Morató X, Pinto-Prades JL, Abellán-Perpiñán JM (2001) Equity considerations in health care: the relevance of claims. Health Econ 10: 187–205CrossRefGoogle Scholar
  9. Chun Y (1989) A noncooperative justification for egalitarian surplus sharing. Math Soc Sci 17: 245–261CrossRefGoogle Scholar
  10. Costa-Gomes M, Crawford V, Broseta B (2001) Cognition and behavior in normal-form games: an experimental study. Econometrica 69: 1193–1235CrossRefGoogle Scholar
  11. Dagan N, Serrano R, Volij O (1997) A Noncooperative view of consistent bankruptcy rules. Games Econ Behav 18: 55–72CrossRefGoogle Scholar
  12. Fehr E, Schmidt KM (1999) A theory of fairness, competition and cooperation. Q J Econ 114: 817–868CrossRefGoogle Scholar
  13. Fischbacher U (2007) z-Tree: zurich toolbox for ready-made economic experiments. Exp Econ 10(2): 171–178CrossRefGoogle Scholar
  14. Frolich N, Oppenheimer JA, Eavey CL (1987) Choices of principles of distributive justice in experimental groups. Am J Polit Sci 31: 606–636CrossRefGoogle Scholar
  15. Gächter S, Riedl A (2006) Dividing justly in bargaining problems with claims: normative judgements and actual negotiations. Soc Choice Welf 27: 571–594CrossRefGoogle Scholar
  16. Gauthier D (1986) Morals by agreement. Clarendon Press, OxfordGoogle Scholar
  17. Ju B-G, Miyagawa E, Sakai T (2007) Non-Manipulable division rules in claim problems and generalizations. J Econ Theory 132: 1–26CrossRefGoogle Scholar
  18. Ju B-G, Moreno-Ternero JD (2008) On the equivalence between progressive taxation and inequality reduction. Soc Choice Welf 30(4): 561–569CrossRefGoogle Scholar
  19. Hart O (1999) Different approaches to bankruptcy, in governance, equity and global markets. In: Proceedings of the annual bank conference on development economics in Europe June 21–23Google Scholar
  20. Herrero C (2003) Equal awards versus equal losses: duality in bankruptcy. In: Sertel MR, Koray S (eds) Advances in economic design. Springer, Berlin, pp 413–426Google Scholar
  21. Herrero C, Villar A (2001) The three musketeers: four classical solutions to bankruptcy problems. Math Soc Sci 42: 307–328CrossRefGoogle Scholar
  22. Herrero C, Moreno-Ternero JD, Ponti G (2003) An experiment on bankruptcy. IVIE Discussion Paper WP-AD 2003-03Google Scholar
  23. Kaminski M (2006) Parametric rationing methods. Games Econ Behav 54: 115–133CrossRefGoogle Scholar
  24. Moreno-Ternero JD (2002) Noncooperative support for the proportional rule in bankruptcy problems. Universidad de Alicante, MimeoGoogle Scholar
  25. Moulin H (2000) Priority rules and other asymmetric rationing methods. Econometrica 68: 643–684CrossRefGoogle Scholar
  26. Moulin H (2002) Axiomatic cost and surplus sharing. In: Arrow KJ, Sen AK, Suzumura K (eds) Handbook of social choice and welfare, vol I. Elsevier Science B.V, AmsterdamGoogle Scholar
  27. Nash J (1953) Two-person cooperative games. Econometrica 21: 128–140CrossRefGoogle Scholar
  28. O’Neill B (1982) A problem of rights arbitration from the Talmud. Math Soc Sci 2: 345–371CrossRefGoogle Scholar
  29. Ochs J, Roth A (1989) An experimental study of sequential bargaining. Am Econ Rev 79: 355–384Google Scholar
  30. Roemer JE (1996) Theories of distributive justice. Harvard University Press, CambridgeGoogle Scholar
  31. Skyrms B (1996) Evolution of the social contract. Cambridge University Press, CambridgeGoogle Scholar
  32. Sugden R (1986) The Economics of rights, cooperation and welfare. Basil Blackwell, Inc, OxfordGoogle Scholar
  33. Thomson W (2003) Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey. Math Soc Sci 45: 249–297CrossRefGoogle Scholar
  34. Yaari ME, Bar-Hillel M (1984) On dividing justly. Soc Choice Welf 1: 1–24CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2009

Authors and Affiliations

  • Carmen Herrero
    • 1
    • 2
  • Juan D. Moreno-Ternero
    • 3
    • 4
    • 5
  • Giovanni Ponti
    • 1
    • 6
    Email author
  1. 1.Departamento de Fundamentos del Análisis EconómicoUniversidad de AlicanteAlicanteSpain
  2. 2.IVIEValanciaSpain
  3. 3.Departamento de Teoría e Historia EconómicaUniversidad de MálagaMálagaSpain
  4. 4.Department of EconomicsUniversidad Pablo de OlavideSevilleSpain
  5. 5.COREUniversité catholique de LouvainLouvain-la-NeuveBelgium
  6. 6.Dipartimento Economia Istituzioni TerritorioUniversità di FerraraFerraraItaly

Personalised recommendations