Effects of Profitable Downsizing on Collective Bargaining

We experimentally test how acceptance thresholds react to the decisionof the proposer in a three party ultimatum game to exclude oneof two responders with veto power from the game. We elicit responderacceptance thresholds in case the proposer decides to exclude one ofthem, what increases the available pie, and in case he doesn’t excludehim despite strong monetary incentives. We find that on the aggregatelevel the proposer’s decision has no effect on acceptance thresholds.However, if the proposer excludes one responder, the distribution ofthresholds becomes bimodal, indicating a polarization in behavior.