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 Güth

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

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). Available at SSRN: https://ssrn.com/abstract=263524 or http://dx.doi.org/10.2139/ssrn.263524

Werner Güth (Contact Author)

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Judit Kovacs

University of Debrecen ( email )

Böszörményi u. 138
H-4032 Debrecen, 4032
Hungary

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