Multilateral bargaining with proposer selection contest

Duk Gyoo Kim, Sang Hyun Kim

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study investigates the competition to be selected as the proposer in a subsequent multilateral bargaining game experimentally. The experimental environment varies in two dimensions: reservation payoffs (homogeneous or heterogeneous) and information on the extent of each subject's investment in the competition (public or private). The proposer's share was significantly lower than what theory predicts, and with taking into account the proposer's partial rent extraction, subjects over-invest to increase their chances of winning the right to propose. More importantly, we find that inefficiency (due to the costly competition) and inequity go hand in hand; the surplus was distributed most efficiently and most equally when subjects were informed of who had spent how much in the competition, and slightly more when the reservation payoffs were heterogeneous. The proportion of proposals being rejected was smaller in the public treatments than in the private treatments. This study contributes to the literature by identifying formal rules that are more effective in establishing efficient informal norms.

Original languageEnglish
Pages (from-to)38-73
Number of pages36
JournalCanadian Journal of Economics
Issue number1
Publication statusPublished - 2022 Feb 1

Bibliographical note

Funding Information:
We thank Chulyoung Kim, Peter Norman, Huseyin Yildirim and the participants of the seminars at Yonsei University, 2018 HeiKaMaxY workshop, 2018 Korean Econometric Society winter meeting, 2018 Yonsei‐Kyoto‐Osaka Economic Theory Workshop, the 14th meeting of the Society of the Social Choice and Welfare, 2018 Economic Science Association World Meeting and 2018 International Conference on Game Theory for valuable comments. We also thank Kiril Lavrov for his research assistance. Duk Gyoo Kim gratefully acknowledges the financial support of the Dan Searle Fellowship of Donors Trust and the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation),Project‐ID 139943784–SFB 884. All authors have contributed equally.

Publisher Copyright:
© 2022 Canadian Economics Association.

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


Dive into the research topics of 'Multilateral bargaining with proposer selection contest'. Together they form a unique fingerprint.

Cite this