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Bargaining behavior and the tragedy of the anticommons

2012; Elsevier BV; Volume: 84; Issue: 2 Linguagem: Inglês

10.1016/j.jebo.2012.08.002

1879-1751

Michael D. Parente, Abel Winn,

Economic and Environmental Valuation

To date, most experimental studies of the tragedy of the anticommons treat individuals' preferences as common knowledge. Here, we conduct experiments in which values are private information. We vary the bargaining institution, the buyer's signaled willingness to pay, and the fraction of sellers whose inputs must be assembled. In our experiments simultaneous bargaining gives the buyer a better tradeoff between the total price paid and the risk of failure than sequential bargaining when all sellers' inputs are necessary. When two thirds are necessary assembly failure virtually disappears, but simultaneous bargaining still generates lower prices for the buyer.