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On the Impact of Quotas and Decision Rules in Ultimatum Collective Bargaining

Author

Listed:
  • Feicht, Robert

    (Public Administration of Bavaria)

  • Grimm, Veronika

    (University of Erlangen-Nuremberg)

  • Rau, Holger A.

    (University of Göttingen)

  • Stephan, Gesine

    (Institute for Employment Research (IAB), Nuremberg)

Abstract
We conduct multi-person one-shot ultimatum games that reflect important aspects of collective bargaining. In all treatments a proposer has to divide a pie among herself and two groups of three recipients each. She cannot discriminate within, but across groups. A committee with representatives from one or both groups takes acceptance decisions. In a 2x2 design we vary (i) representation in the decision committee (one vs. both groups) and (ii) the decision rule (unanimity vs. majority voting). We find that (i) representation of a group in the committee is crucial for receiving a significant share, (ii), proposals are balanced only if both groups have veto power (iii) negotiations often fail if the decision environment gives insufficient guidance on what an appropriate proposal is and (iv) non-binding communication substantially reduces rejection rates and proposer shares.

Suggested Citation

  • Feicht, Robert & Grimm, Veronika & Rau, Holger A. & Stephan, Gesine, 2015. "On the Impact of Quotas and Decision Rules in Ultimatum Collective Bargaining," IZA Discussion Papers 9506, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9506
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    References listed on IDEAS

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    More about this item

    Keywords

    multi person ultimatum game; dictator game; collective decisions; experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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