Respecting Entitlements in Legislative Bargaining – A Matter of Preference or Necessity?

We investigate whether fairness concerns overrule strategic behaviour in legislative bargaining with entitlements. In a lab experiment, we vary bargaining power by using either majority rule or dictator rule to implement a division. We apply coarse measures in order to assess whether entitlements are respected. Our results show that with experience over one third of proposers make “extreme” offers, assigning at most 10% of the surplus to partners whose consent is not needed under the respective rule. Having observed extreme outcomes in the past increases the likelihood of own extreme proposals. Overall, we find significant limitations in the acknowledgment for others' entitlements, in particular for groups in which individual contributions differ.