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Abstract
In many cases, governments invite interest groups to use collaborative negotiation to resolve environmental conflicts. A characteristic of these negotiations is that the parties lack ex ante information about their opponents’ ordinal and cardinal preferences. We argue in this paper that most laboratory experiments that have investigated the outcomes of collaborative negotiation have not taken this information asymmetry into account fully. In this paper, we introduce private information into an experimental protocol that we originally employed to investigate collaborative negotiation with full information. We hypothesise that making information private will have only a limited effect on subjects’ abilities to reach Pareto-efficient bargains or on the effect that entitlements will have on the outcome; but that considerations of equity will become less important. We find evidence to support these hypotheses, though the effect of entitlements seems more robust under private than full information.
Acknowledgements
The experiments employed in this research were conducted at the University of Canterbury.
Funding
This work was supported by the Donner Canadian Foundation [grant number A-02-98]; and the College of Business and Economics (2010) of the University of Canterbury.
Supplemental data
Supplemental data for this article can be accessed at http://dx.doi.org/10.1080/21606544.2014.972990.
Notes
1. Also known as cooperative bargaining, consensus-building, negotiated rulemaking, deliberative democracy, and mediated negotiation.
2. This is the approach set out in the United States Negotiated Rule Making Act. See, for example, Pritzker and Dalton (Citation1995) and Lubbers (Citation2007–2008).
3. We test only for parties’ views concerning equity, not “fairness.” For the latter, see Keisner et al. (Citation2013).
4. Sample instructions are provided in Appendix A in the online Supplementary Material.
5. In practice, it was only the additive term that varied for subjects across treatments/rounds.
6. The experimental currency pay-off tables have different boundaries in Treatments I/II vs. Treatments III/IV because changes in exchange rates mean peripheral allocations that yield both parties positive real earnings in one treatment may yield one party negative earnings in another. Treatments I/II have 199 eligible allocations, while Treatments III/IV lose 63, but gain 79, yielding 215 eligible allocations. Calculators were provided for each person.
7. If this allocation had been the backstop, the Nash bargain would have occurred at (10,10)/(10,10), with pay-offs of $9.10 and $36.40, respectively.
8. Sessions were run in the orders (I, III, II, IV),(I, IV, II, III), (II, III, I, IV), (II, IV, I, III), (III, I, IV, II), (III, II, IV, I), (IV, I, III, II), and (IV, II, III, I), then repeated.
9. All regressions are reported in Appendix B in the online Supplementary Material. Pair demographics include risk preference, age, sex, ethnicity, economics and math courses taken, self-reported GPA, and English first language. Specifications and tests were run with and without demographics, with very similar results regarding treatment effects.
10. These p-values are from the regressions using pair averaged demographic characteristics, which had a better fit. The p-values based on pair differenced characteristics are .045 (I vs. II) and .076 (III vs. IV).
11. We cannot simply compare how joint earnings differ because they are identical at N and E.
12. This index does not capture the absolute distance of agreements to either key allocation, but rather the relative success of either allocation in predicting earnings shares. Agreements north-east or south-west of the key allocations would yield values capped at −0.3 or +0.3, but this occurred in only 6% of agreements.