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Bargaining in a Spatial Context: An Experimental Study
Unformatted Document Text:  2 between union-firm pairings later in a sequence (within the same industry and, therefore, being better informed) are less likely to result in strikes than those earlier in the sequence. The ultimatum game is among the more famous bargaining experiments, especially since its rationalist predictions are not born out in experiments. In these experiments, the Proposer nearly always offers more in the take-it-or-leave-it offer than a strict economic analysis would predict. (See, e.g., Henrich et al. 2001; Camerer and Thaler 1995.) This seems to suggest that the Proposer is sensitive to the Responder’s perception of fairness; if an unfair offer was proposed, it was expected to be rejected by the Responder even though the Responder would receive less due to the rejection. (See also Smith 1994.) A subset of the bargaining literature focuses on the spatial framework. Within that framework, there is a large degree of indeterminism regarding bargaining behavior. The broadest hypothesis is that the final agreement should be in the range of mutual benefit (dating back to Edgeworth 1881). Others have applied theoretical constructs to make more determinant predictions, but the ability to justify a range of predictions undermines this purely theoretical approach. However, each of the solutions under investigation here does have built within them assumptions which can be moderated experimentally. The first depends on whether the actors rely on the status quo as a baseline (as the Nash and KS do) or ignore the status quo (FD). The second depends on whether the actors focus on certain bargaining asymmetries (as the KS does) or ignore them (Nash and FD). Experiments testing these different bargaining solutions (e.g., Nydegger and Owen 1975; Nydegger 1977; Heckathorn 1978; Schellenberg 1988) have stayed relatively close to the original theoretical set-ups yet still tended to find equivocal results. In Political Science, the Nash solution has recently been applied to a single-issue spatial context (Milner and Rosendorff

Authors: Butler, Christopher. and Bellman, Mary.
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between union-firm pairings later in a sequence (within the same industry and, therefore, being
better informed) are less likely to result in strikes than those earlier in the sequence. The
ultimatum game is among the more famous bargaining experiments, especially since its
rationalist predictions are not born out in experiments. In these experiments, the Proposer nearly
always offers more in the take-it-or-leave-it offer than a strict economic analysis would predict.
(See, e.g., Henrich et al. 2001; Camerer and Thaler 1995.) This seems to suggest that the
Proposer is sensitive to the Responder’s perception of fairness; if an unfair offer was proposed, it
was expected to be rejected by the Responder even though the Responder would receive less due
to the rejection. (See also Smith 1994.)
A subset of the bargaining literature focuses on the spatial framework. Within that
framework, there is a large degree of indeterminism regarding bargaining behavior. The
broadest hypothesis is that the final agreement should be in the range of mutual benefit (dating
back to Edgeworth 1881). Others have applied theoretical constructs to make more determinant
predictions, but the ability to justify a range of predictions undermines this purely theoretical
approach. However, each of the solutions under investigation here does have built within them
assumptions which can be moderated experimentally. The first depends on whether the actors
rely on the status quo as a baseline (as the Nash and KS do) or ignore the status quo (FD). The
second depends on whether the actors focus on certain bargaining asymmetries (as the KS does)
or ignore them (Nash and FD).
Experiments testing these different bargaining solutions (e.g., Nydegger and Owen 1975;
Nydegger 1977; Heckathorn 1978; Schellenberg 1988) have stayed relatively close to the
original theoretical set-ups yet still tended to find equivocal results. In Political Science, the
Nash solution has recently been applied to a single-issue spatial context (Milner and Rosendorff


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