Kurtis Swope

Collective Action with Incomplete Commitment: Experimental Evidence

Face-to-face communication is investigated as an efficiency-enhancing mechanism in experimental common-pool resource environments in which the appropriation activities of outside appropriators create coordination and monitoring problems for the communicating group. We identify three distinct problems that can threaten successful collective action. Outsiders respond strategically to reductions in appropriation by cooperating group members. Members of the communicating group deviate from agreements more frequently when monitoring is imperfect and over appropriation can be blamed on outsiders. Groups that are allowed to communicate anticipate the potential problems and have difficulty reaching agreements or committing to a specific appropriation rule.

An Experimental Investigation of Excludable Public Goods

This paper extends the research on incentive compatible institutions for the provision of public goods by imposing a minimum contribution that must be met in order for an individual to enjoy the benefits of the public good. Excluding individuals who do not contribute at least the minimum transforms the linear n-player pure public goods game to an n-player coordination game with multiple, Pareto-ranked Nash equilibria. The experimental results show that exclusion increases contributions to the public good in most cases. However, an increase in contributions may not be sufficient to increase social welfare because there is a welfare cost to excluding individuals when the good is non-rival. Furthermore, exclusion can decrease both contributions and welfare in environments in which individuals fail to coordinate their contributions. The results are sensitive to the minimum contribution requirement and to the relative returns from the public and private alternatives.

Contracts, Behavior, and the Land-Assembly Problem:An Experimental Study

We use multilateral bargaining experiments to examine how the order of bargaining (simultaneous or sequential) and the nature of contracts (contingent or non-contingent) affect the duration of bargaining, the efficiency of exchange, and the distribution of the surplus in a laboratory land-assembly game with one buyer and two sellers. While theory predicts an earnings advantage for the first seller when contracts are sequential and contingent, and for the second seller when contracts are sequential and non-contingent, we find that when a seller has an earnings advantage in the laboratory, it is the first seller to bargain in the non-contingent contract treatments. This result contradicts conventional wisdom and a common result from the land-assembly literature that it is advantageous to be the last seller to bargain, a so-called “holdout”. We also find evidence that sequential bargaining leads to more aggressive seller bargaining and greater bargaining delay than simultaneous bargaining, ceteris paribus, and that non-contingent contracts increase bargaining delay and the likelihood of failed agreements. The majority of sellers indicated a preference for being the first seller to bargain in all sequential bargaining treatments.

Institutions and information in multilateral bargaining experiments

Abstract This paper examines the behavior in multilateral bargaining experiments with alternating offers and asymmetric information. In all experiments, a single buyer has up to ten bargaining periods to purchase one unit of a good from each of two sellers. Treatments vary based on who makes the first offer (buyer or sellers), timing (consistent buyer-offer/sellers-demand or alternating), and information (buyer’s value and sellers’ costs are known or come from a uniform distribution). We find that actual bargaining outcomes are virtually identical when offers alternate, regardless of which player makes the first offer. We find that alternating offers reduce bargaining delay slightly compared to treatments in which one side or the other makes repeated take-it-or-leave-it offers. Finally, we find that incomplete information increases bargaining delay and the likelihood of failed agreements.