Assessing power in spatial bargaining: When is there advantage to being status-quo advantaged?

Bargaining at various levels has taken on a greater role in our understanding of international relations. Milner's (1997) work presented a model in which bargaining at the international level would result in the status quo advantaged actor getting his ideal agreement. We conducted a face-to-face experiment between sixty-eight pairings of men to test this prediction in a controlled setting. All of the participants were presented with the same bargaining problem in different contexts. For each pairing, we collected data on a trial bargaining period under a "classic" Nash bargaining problem (under private information, but without monetary incentive) and two bargaining periods with an underlying unidimensional issue space (i.e., Milner's model, once under private information, the other under full information, each with monetary incentive). While the Nash bargaining solution was consistently chosen under the "classic" Nash bargaining problem, it was rarely chosen when the bargaining problem represented an underlying unidimensional issue space. For the unidimensional bargaining problem, private information did not facilitate producing any consistent outcome; under full information, the "equity point"-in which each participant earned the same dollar amount-was chosen significantly more often than any other outcome, even under a context in which the equity point was incentive incompatible for one actor to agree to that agreement. The overall results suggest that the Nash bargaining solution is predictive when it is also a focal point in the bargaining space, but is only prescriptive in a bargaining space with many mutually improving points. Finally, private information allowed the status quo advantaged actor to get a better deal compared to the full-information condition.