Collaborative environmental negotiation with private non-verifiable information: an experimental test
In many cases governments invite interest groups to use collaborative negotiation to resolve environmental conflicts. Characteristic of these negotiations is that the parties lack ex ante information about their opponents’ ordinal and cardinal preferences. We argue in this paper that most laboratory experiments that have investigated the outcomes of collaborative negotiation have not taken this information asymmetry into account fully. In this paper, we devise, and implement, an experimental protocol that allows for a strong test of the effects of private information. We hypothesize that making information private will have only a limited effect on subjects’ abilities to reach Pareto efficient bargains or on the effect that entitlements will have on the outcome; but that considerations of equity will become less important. We find evidence to support all three of these hypotheses.