Why Do People Veto? An Experimental Analysis of the Valuation and the Consequences of Varying Degrees of Veto Power

26 Pages Posted: 21 Mar 2001

See all articles by Werner Guth

Werner Guth

Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Judit Kovacs

University of Debrecen

Date Written: June 2000

Abstract

By vetoing one questions mutually efficient agreements. On the other hand the threat of vetoing may prevent exploitation. Based on a generalization of ultimatum bargaining (Suleiman, 1996) we first elicit the responders; certainty equivalents for three different degrees of veto power. Afterwards the corresponding bargaining rule is implemented. The experimental data reveal that proposers are afraid of more veto power but that responders only care for commanding veto power at all, not for its strength.

JEL Classification: C9, C7, H8

Suggested Citation

Güth, Werner and Kovacs, Judit, Why Do People Veto? An Experimental Analysis of the Valuation and the Consequences of Varying Degrees of Veto Power (June 2000). CESifo Working Paper Series No. 308. Available at SSRN: https://ssrn.com/abstract=263524

Werner Güth (Contact Author)

Max Planck Institute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Judit Kovacs

University of Debrecen ( email )

Böszörményi u. 138
H-4032 Debrecen, 4032
Hungary

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