We augment the Nash bargaining solution by fairness ideals in order to predict the outcomes of unstructured bargaining after the individual production of a joint surplus. If production depends on individual effort, talent, and luck, fairness ideals might be based on the accountability principle. In a lab experiment with real production and unstructured bargaining, we investigate subjects’ fairness ideals, their bargaining behaviour, and the outcomes of the bargaining process. As impartial spectators, about 75% of the subjects hold meritocratic or libertarian fairness ideals. However, these ideals do not affect their bargaining behaviour which is strongly opportunistic. Therefore the fairness-augmented Nash solution with opportunistic fairness ideals predicts the bargaining outcome best.
|Number of pages||21|
|Journal||Social Choice and Welfare|
|Early online date||31 Jul 2019|
|Publication status||Published - 1 Dec 2019|
- distributive justice
- unstructured bargaining
- Nash bargaining solution
- self-serving fairness
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Luhan, W. (Creator), Roos, M. W. M. (Creator) & Poulsen, O. (Creator), University of Portsmouth, 2020