Kiel Working Papers, Kiel Institute for World Economics
No 1638:
Equal Split in the Informal Market for Group Train Travel
Israel Waichman, Artem Korzhenevych and Till Requate
Abstract: In this paper we make use of a unique dataset collected in
the central train station of Kiel, Germany. A group ticket is used by
individual proposers who search for co-travelers to share the ride with
shortly before the train departure. The bargaining behavior resembles the
Ultimatum game to the extent that proposers request a fixed price for a
shared ride and potential co-travelers usually accept or reject the deal.
We observe that the prevailing price corresponds to the equal split of the
ticket cost between the maximum possible number of co-travelers. This
result is remarkable because the positions of the bargaining parties are
hardly symmetric and the formation of the full group is not guaranteed.
Using a simple agent-based model we are able to identify some sufficient
conditions leading to the observed distribution of prices. Finally, we show
that the probability to accept an unusually high offer is decreasing with
the price and increasing when the offer is made right before the train
departure
Keywords: natural field experiment; bargaining; focal point; equal split; agent-based model; (follow links to similar papers)
JEL-Codes: C78; C93; D74; D83; (follow links to similar papers)
28 pages, July 2010
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