An Experimental Nash Program: A Comparison of Structured v.s. Semi-Structured Bargaining Experiments

Michela Chessa, Nobuyuki Hanaki, Aymeric Lardon and Takashi Yamada

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: While the market design advocates the importance of good design to achieve desirable properties, experiments on coalition formation theory have shown fragility in proposed mechanisms to do so. We experimentally investigate the effectiveness of “structured” mechanisms that implement the Shapley value as an ex-ante equilibrium outcome with those of corresponding “semi-structured” bargaining procedures. We find a significantly higher frequency of the grand coalition formation and the higher efficiency in the semi-structured than in the structured procedure regardless of whether it is demand-based or offer-based. While significant differences in the resulting allocations are observed between the two structured procedures, little difference is observed between the two semi-structured procedures. Finally, possibility of free-form chat induces the equal division more frequently than without it. Our results suggest, when it comes to bargaining and coalition formation, not having various restrictions imposed by different mechanisms may lead to more desirable outcomes.

Date: 2023-11, Revised 2024-09
New Economics Papers: this item is included in nep-exp and nep-gth
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