Abstract
A new experimental paradigm for two-person bargaining is introduced. It can be applied to decision making in two-person systems at the level of the group as well as at the level of the organization, the society, and the supranational system. The paradigm is used in a comparative evaluation of the Nash and Smorodinsky-Kalai solutions to the bargaining problem. The aim is to devise a means for experimentally analyzing two-person two-party bargaining processes which avoids a number of difficulties afflicting previous experimental paradigms. In particular, the paradigm presented here is intended to control equity and related processes as they affect the process and outcome of bargaining. A discussion of means for conceiving equity and related processes using the Nash and Smorodinsky-Kalai bargaining models is provided together with an illustration of procedures for experimentally controlling them. The experimental results strongly support the Smorodinsky-Kalai model over the Nash model.
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