On the Adjudication of Conflicting Claims: An Experimental Study

This paper reports an experimental study on three well known solutions for claims problems, that is, the constrained equal-awards, the proportional, and the constrained equal-losses rules. To do this, we first let subjects play three games designed such that the unique equilibrium allocation coincides with the recommendation of one of these three rules. Moreover, we also let subjects play an additional game, that has the property that all (and only) strategy profiles in which players coordinate on the same rule constitute a strict Nash equilibrium. While in the first three games subjects? play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device. We also administered a questionnaire to a different group of students, asking them to act as an impartial arbitrator to solve (among others) the same claims situations played in the lab. Also in this case, the proportional solution was selected by the vast majority of respondents