Efficiency in Bargaining Games with Alternating Offers
AbstractBargaining games model situations in which the realization of potential benefits is jeopardized by conflicting bargaining powers. Most of the literature on bargaining behavior focuses on bargaining over gains. Exploration of behavior in situations under which agents bargain over losses has received only limited attention from the profession. An important question is whether the negative effect of competing bargaining powers on the efficiency of agreements is more severe in bargaining over gains or over losses. Another understudied research question is how the likelihood that the outcome of a negotiation will actually be implemented affects efficiency of bargaining. We design an experiment that addresses these two questions. We find that in alternating offers games, outcomes of bargaining over gains are more efficient than outcomes of bargaining over losses. We also find that the likelihood that an interaction is implemented has a positive effect on the efficiency of bargaining.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 3 ()
Contact details of provider:
Efficiency; Bargaining; Experiments; Payoff Protocols;
Find related papers by JEL classification:
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
- James Andreoni & Emily Blanchard, 2006.
"Testing subgame perfection apart from fairness in ultimatum games,"
Springer, vol. 9(4), pages 307-321, December.
- Andreoni,J. & Blanchard,E., 2002. "Testing subgame perfection apart from fairness in ultimatum games," Working papers 15, Wisconsin Madison - Social Systems.
- Ken Binmore, 2007. "Does Game Theory Work? The Bargaining Challenge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262026074, December.
- Jayson L. Lusk & M. Darren Hudson, 2010. "Bargaining Over Losses," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 83-91.
- Friedman,Daniel & Sunder,Shyam, 1994. "Experimental Methods," Cambridge Books, Cambridge University Press, number 9780521456821, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.