Imperfect Information, Multilateral Bargaining, and Unitization: An Experimental Analysis

"This paper provides an experimental analysis of bargaining under imperfect information, molded by the circumstances found in oil field unitization. The purpose of the study is two-fold. One purpose is to provide a more in-depth analysis of how information affects bargained shares and contractual failure in unitization. A second purpose is to provide a (partial) link between the unitization field data, and the highly developed experimental bargaining work of Roth and Malouf, and Roth, Malouf, and Murnighan. The results suggest a new interpretation of how imperfect information molds sharing rules and undermines unitization contracting. This interpretation is highly consistent with problems previously identified by Roth and his co-investigators. The analysis then reexamines the field data and shows how the analysis sheds new light on field evidence."