TEAM SELECTION - AN EXPERIMENTAL INVESTIGATION

Players 1 and 2 own certain resources which Player 0, the entrepreneur , wants to employ. Let the gross profit of the entrepreneur 0 after se lecting a team T of resources be V(T), where T can take values empty s et, {1}, {2} or {1, 2}. How much will Player 0 pay for the resources? In this paper, a simple stylized bargaining process, namely Ultimatum Bargaining, is assumed. In a first step, Players 1 and 2 demand certai n rewards a(i) for their resources. Player 0 then selects a team T, th e members of which are paid by him at the rates they have demanded, a( i). Then a0 = V(T) - SIGMA(i is-an-element-of T)a(i) is left for the e ntrepreneur. Such a ''bargaining structure'' can be found, for example , in the PURPA-auctions (electricity auctions) in the United States. F or most other cases, the game describes a possible last round with the ultimatum demands of the potential members. In this paper, experiment s are presented with V({1, 2}) = DM 100.00, V(empty set) = 0, and with five different values for e = V({1}) or V({2}), the profit earned by one-person teams. Although the game-theoretic equilibria vary greatly for different values of e, the average demands of the potential team m embers remained fairly constant.