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RobertSKMiles's avatar

The thing that interests me about the 85:15 figure is how close it is to the 80:20 split generally found as the least fair split commonly accepted in the Ultimatum Game (Henrich et al 2004).

The situations are very similar. In effect, your "whichever party gets to determine whether a transaction takes place" is equivalent to the UG's "whichever party is making the ultimatum".

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Overcoming Bias Commenter's avatar

I think that the fact of surplus-splitting becomes more salient the more deminsions the parties can use to split the surplus. The examples in the article mainly deal with a single dimension of price. Try examining the processes of a modern purchasing department and you will see innumerable instances of strategies around gaining more of the surplus in a negotiated setting. Examples:1. Providing the preferred form of agreement in a request for proposals.2. Requiring bidders to justify any deviations from the preferred form.3. Stating weights between various factors when those factors are clearly incommensurate (meaning that bidders must try to win in each factor being examined).4. During negotiations, having a multi-step process for any negotiated terms, where the pruchasing department must -- with great reluctance -- go back to the legal department for approval.And so on.

Max

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