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. You should think of this number as the minimum number of points you would be willing to receive in an accepted settlement. It is not necessarily the exact number of points you will receive.
If your request and the other player’s request add up to 100 or less, the mechanism makes a recommendation. The exact calculation rule is not disclosed. The recommendation is based on both players’ requests and on the points left after those requests are taken into account.
If both players accept the recommendation, all 100 points will be allocated between the two players, and each player will receive at least the number of points they requested. This means that you may receive more than the number you entered.
In general, higher requests make settlement less likely, and lower requests make settlement more likely. A useful way to think about your choice is therefore to enter the minimum number of points that you would be willing to accept.
After seeing the recommendation, both players simultaneously decide whether to accept or reject it. The recommendation is implemented only if both players accept it. If at least one player rejects, bargaining breaks down.
If your request and the other player’s request add up to more than 100, the mechanism recommends bargaining breakdown.
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: The exact formula used by the mechanism is not disclosed. 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. The requests are jointly feasible, so the platform makes a recommendation. If both players accept, the round ends with the recommended allocation.
Example 2: Player 1 submits 62 and player 2 submits 42. Since the total request is above 100, the platform 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: Your outside option is 51. You submit 52, your opponent submits 40, and the platform recommends 56 to you. If both players accept, your earnings are 56 ECU. If you reject, bargaining breaks down and your earnings are 51 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.