Unequal Information, Unequal Allocation: Bargaining field experiments in NE Brazil

We assess how unequal information affects the bargaining within resource allocation, a stakeholder interaction that is critical for climate adaptation within the water sector. Motivated by water allocation among unequal actors in NE Brazil, within Ceará State, we employ ‘ultimatum’ field experiments in which one participant lacks information. We find that, despite having veto power, the less informed are vulnerable to inequity. When all are informed, we see a typical resource split (60% initiator–40% responder) that balances an initiator's advantage with a responder's willingness to punish greed. When instead responders have only a resource forecast upon which to base decisions, the fully informed initiators get 80% of resources for conditions of resource scarcity. Thus, despite each of the stakeholder types having an unquestioned ‘seat at the table’, information asymmetries make bargaining outcomes more unequal. Our results are widely relevant for adaptation involving the joint use of information, and suggest that equity can rise with dissemination of scientific outputs that are integral in adaptation.

► Using experiments, we assess how asymmetric information affects water bargaining.
► When fully informed, our populations produce a 60–40% split common in the literature.
► With asymmetric information and water scarcity, proposers get up to 80% of the resource.
► Greater effort to equalize forecast information across stakeholders should reduce inequity.