1Constrained Instability: Experiments on the Robustness of the Uncovered Set

The uncovered set has frequently been proposed as a solution concept for decision-making environments where majority rule is being used. It coincides with the core when the core exists, and is always a subset of the Pareto set. Theory suggests that sophisticated decision makers using majority rule will propose only outcomes in the uncovered set. A difficulty in computing the uncovered set for any particular set of spatial preferences has been an obstacle to rigorous laboratory experiments on the uncovered set as a solution concept. Recently, researchers developed a grid search based method to estimate the uncovered set at a satisfactory level of precision. This paper reports computer-mediated, free-communication, five-person laboratory experiments with two configurations of preferences. The results suggest that majority rule does in fact produce outcomes overwhelmingly in the uncovered set. Furthermore, when preferences shift, outcomes track the uncovered set. While outcomes tend to occur within the uncovered set, they are not necessarily stable; majority dominance relationships still produce instability, albeit constrained by the uncovered set