Bargaining over communal endowments after prior interaction: Experimental evidence

We report on a laboratory experiment that identifies the role that prior interaction
plays in determining claims in subsequent bargaining. We implement a tacit bargaining game, in which a pair of players attempt to agree on an allocation of a discrete set of objects between them. Prior to the bargaining, in some treatments the pair jointly completes a route-finding task. We find that pairs who have this prior interaction are more likely to come to an agreement in bargaining. These more frequent agreements result not from a reduction in the value of the objects people claim, but because they coordinate more successfully on an allocation which is suggested by the way in which the bargaining game is described. This observation is evidence that prior interaction alone makes people more likely to apply principles of team reasoning to attempt to resolve the strategic conflict in bargaining.