Summary

You'll be in groups of 10 and play 10 rounds. You'll be randomly matched with someone each round. Each round has 100 objects A and 100 objects B. You'll bargain to split them. You have an outside option for A, randomly chosen between 0 and 100. For B, your outside option is zero, but you have a multiplier 0.7, 0.8, 0.9, 1, 1.1, 1.2, or 1.3. The objects are interdependent, and you cannot agree on split of objects B without agreeing on split of objects A.

You submit desired numbers of objects A to the mechanism, and the mechanism determines the suggested split of objects using the following. a1 and a2 are requested numbers by player 1 and player 2, respectively:

• If [a1 + a2 > 100], then mechanisms suggest to revise the numbers.
• If [a1 + a2 ≤ 100], then:
  • If [a1 > 50], the mechanism suggests [a1] objects A and [100 - a1] objects B to player 1. The mechanism suggests [100 - a1] objects A and [a1] objects B to player 2.
  • If [a2 > 50], the mechanism suggests [a2] objects A and [100 - a2] objects B to player 2. The mechanism suggests [100 - a2] objects A and [a2] objects B to player 1.
  • If [a1 ≤ 50 and a2 ≤ 50], the mechanism suggests 50 objects A and 50 objects B to both players.

If mechanism suggest revising of the submitted numbers, after players submit new numbers, the mechanism recalculates the suggestion using new numbers a1 and a2:

After the numbers are revised, mechanism recalculates suggestions using the same formulas. If [a1 + a2 > 100] again: bargaining fails.

You can You can accept or reject suggestions by the mechanism. If you or your opponent rejects a suggestion, then breakdown of bargaining occurs.

You have to submit your numbers to the mechanism within 1 minute, otherwise your payoff will be zero.

Earnings are calculated based on the number of objects you agree on

If the number of objects A is greater or equal to the outside option:

Earnings (in ECU)= Number of objects A + Multiplier x Number of objects B

If the number of objects A is smaller than the outside option:

Earnings = 0 ECU

One round will be randomly selected for payment at the end. Each ECU earned equals 0.03 pounds.