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An Experimental Comparison Between Free Negotiation and a Multi-issue Point Mechanism

Hortala-Vallve, Rafael and Llorente-Saguer, Aniol and Nagel, Rosemarie (2010) An Experimental Comparison Between Free Negotiation and a Multi-issue Point Mechanism. Social Science Working Paper, 1336. California Institute of Technology , Pasadena, CA. (Unpublished)

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We propose a multi-issue point mechanism to be used in conflict resolution situations. This mechanism extract “gains from trade” inherent in the differing valuation towards the various issues where conflict exists. In order to assess the performance of this mechanism vis-a-vis unconstrained communication, we run a series of controlled laboratory experiments and find that both mechanisms reach similar levels of welfare, but the multi issue point mechanism allows subjects to reach an agreement more swiftly. In order to analyse in detail the performance of both mechanisms we introduce a classical measure of conflict and see that when conflict is highest, free negotiation sustains most losses: (1) subjects need more time to reach an agreement; (2) the likelihood of gridlock (no agreement) increases.

Item Type:Report or Paper (Working Paper)
Additional Information:We thank Ido Erev, Robin Hogarth, Nagore Iriberri and seminar participants at a number of conferences for helpful comments and discussions. We acknowledge financial support from the British Academy.
Group:Social Science Working Papers
Funding AgencyGrant Number
British AcademyUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:1336
Record Number:CaltechAUTHORS:20170726-142302581
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79434
Deposited By: Jacquelyn Bussone
Deposited On:07 Aug 2017 21:39
Last Modified:03 Oct 2019 18:20

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