Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations.
This paper develops and experimentally implements a simple multi-negotiation bargaining game, in which one agent, called the “developer,” must reach agreements with a series of other agents, called “landowners,” in order to implement a valueincreasing project. The game has a unique subgame perfect N...
| المؤلفون الرئيسيون: | , , |
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| التنسيق: | Working paper |
| اللغة: | English |
| منشور في: |
Oxford Finance
2008
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| _version_ | 1826281775333113856 |
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| author | Goswani, G Noe, T Wang, J |
| author_facet | Goswani, G Noe, T Wang, J |
| author_sort | Goswani, G |
| collection | OXFORD |
| description | This paper develops and experimentally implements a simple multi-negotiation bargaining game, in which one agent, called the “developer,” must reach agreements with a series of other agents, called “landowners,” in order to implement a valueincreasing project. The game has a unique subgame perfect Nash equilibrium under which the surplus from the project is split between the landowner and developer without any dissipation of value. In the actual experiments, however, on average almost half of the value of the project was dissipated. The costs of dissipation fell disproportionately on the developer, who was able to capture less than 5% of the value generated by the project. The results of this experiment call into question the ability of private negotiations between a large number of parties, even in a world without explicit contracting costs, to induce Pareto-optimal allocations of property rights. |
| first_indexed | 2024-03-07T00:33:53Z |
| format | Working paper |
| id | oxford-uuid:80bb944e-97cb-40b4-a040-1a85fc83c89b |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T00:33:53Z |
| publishDate | 2008 |
| publisher | Oxford Finance |
| record_format | dspace |
| spelling | oxford-uuid:80bb944e-97cb-40b4-a040-1a85fc83c89b2022-03-26T21:25:20ZBuying up the block: An experimental investigation of capturing economic rents through sequential negotiations.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:80bb944e-97cb-40b4-a040-1a85fc83c89bEnglishDepartment of Economics - ePrintsOxford Finance2008Goswani, GNoe, TWang, JThis paper develops and experimentally implements a simple multi-negotiation bargaining game, in which one agent, called the “developer,” must reach agreements with a series of other agents, called “landowners,” in order to implement a valueincreasing project. The game has a unique subgame perfect Nash equilibrium under which the surplus from the project is split between the landowner and developer without any dissipation of value. In the actual experiments, however, on average almost half of the value of the project was dissipated. The costs of dissipation fell disproportionately on the developer, who was able to capture less than 5% of the value generated by the project. The results of this experiment call into question the ability of private negotiations between a large number of parties, even in a world without explicit contracting costs, to induce Pareto-optimal allocations of property rights. |
| spellingShingle | Goswani, G Noe, T Wang, J Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title | Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title_full | Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title_fullStr | Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title_full_unstemmed | Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title_short | Buying up the block: An experimental investigation of capturing economic rents through sequential negotiations. |
| title_sort | buying up the block an experimental investigation of capturing economic rents through sequential negotiations |
| work_keys_str_mv | AT goswanig buyinguptheblockanexperimentalinvestigationofcapturingeconomicrentsthroughsequentialnegotiations AT noet buyinguptheblockanexperimentalinvestigationofcapturingeconomicrentsthroughsequentialnegotiations AT wangj buyinguptheblockanexperimentalinvestigationofcapturingeconomicrentsthroughsequentialnegotiations |