The experiment starts once 4 participants have logged in.
You will play 4 rounds. In each round, you will be matched with one other participant. Your opponent will usually change from round to round.
In each round, you and your opponent bargain over 100 points.
At the start of each round, the computer randomly assigns an outside option to each player. The outside option can be any whole number from 0 to 100, with all values equally likely.
Your outside option is the number of points you receive if no agreement is reached.
You will see your own outside option at the start of each round. You will not see your opponent's outside option.
In this treatment, both players submit one number to the mechanism. This number is how many points you ask for.
Let your submitted number be a1 and your opponent's submitted number be a2.
The mechanism then determines a recommendation.
In words, the mechanism tries to satisfy both claims and split any unclaimed points equally between the two players.
After seeing the recommendation, both players simultaneously decide whether to accept or reject it. If both accept, the round ends with that allocation. If at least one player rejects, bargaining breaks down.
If bargaining breaks down, you receive your outside option.
You have 60 seconds to submit your number to the mechanism and 30 seconds to accept or reject the recommendation.
Important: Each round is time-limited. If you do not submit or respond before a deadline, the current round ends and both players receive their outside options. The non-responding participant will not take part in future bargaining rounds.
Example 1: Player 1 submits 52 and player 2 submits 30. Since 52 + 30 = 82, the mechanism recommends 61 to player 1 and 39 to player 2. If both players accept, the round ends with that split.
Example 2: Player 1 submits 62 and player 2 submits 42. Since 62 + 42 = 104, the mechanism recommends bargaining breakdown.
If you accept a recommendation and your opponent also accepts it, your earnings equal the number of points assigned to you in that recommendation.
The number of points you receive is the number of ECU you earn in that round.
If bargaining breaks down, your earnings equal your outside option.
If agreement is reached: Earnings = number of points you receive in the agreement.
If no agreement is reached: Earnings = your outside option.
Example 1: Your outside option is 45. You submit 50, your opponent submits 36, and the mechanism recommends 57 to you. Both players accept. Your earnings are 57 ECU.
Example 2: Your outside option is 45. You submit 40, your opponent submits 56, and the mechanism recommends 42 to you. Both players accept. Your earnings are 42 ECU.
Example 3: Your outside option is 25. You submit 55 and your opponent submits 50. Since the total request is above 100, bargaining breaks down. Your earnings are 25 ECU.
At the end of the experiment, one of the 4 rounds will be selected at random for payment.
Your payment from this task is: payment in pounds = ECU earned in the selected round x 0.03.
Example: if you earn 68 ECU in the selected round, your payment is 68 x 0.03 = 2.04 pounds.