The effect of bargaining power on bargaining outcomes: the roles of institutions, earned bargaining position, and social norms

Bargaining is ubiquitous in modern societies, so understanding how economies work requires understanding of how people bargain. In experimental tests, people respond to bargaining power much less than bargaining theories imply, though some results suggest that responsiveness depends on multiple factors. This project is a controlled study of the most important of these factors. A new experiment will isolate the effects of (a) institutional constraints on bargaining, (b) the source of bargaining power (luck, mental prowess, or physical prowess), and (c) whether the social norm of 50/50 splits is consistent with rationality. The results will shed light on the degree to which bargaining theories succeed or fail in describing actual bargaining.