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Communication, Reputation, and Punishment in Sequential Bargaining Experiments

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  • Jeanette Brosig
  • Joachim Weimann
  • Chun-Lei Yang

Abstract

Experiments on sequential bargaining have shown that subjects' behavior is far from the equilibrium prediction. Whereas previous models explain these deviations by some kind of social preferences, we investigate an alternative interpretation of behavior based on the assumption of bounded rational self-interest. Our analyses reveal that, in line with this interpretation, bargaining outcomes depend on subjects' payoff consequences from punishment. However, after preplay communication, we find a much weaker effect of these payoff consequences and a tremendous increase in the number of equal splits. This communication effect can be attributed to reputation effects only to a minor degree, if at all.

Suggested Citation

  • Jeanette Brosig & Joachim Weimann & Chun-Lei Yang, 2004. "Communication, Reputation, and Punishment in Sequential Bargaining Experiments," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(4), pages 576-606, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200412)160:4_576:crapis_2.0.tx_2-u
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    Citations

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    Cited by:

    1. Penn, Jerrod & Hu, Wuyang, 2016. "Making the Most of Cheap Talk in an Online Survey," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236171, Agricultural and Applied Economics Association.
    2. Heinrich, Timo & Brosig-Koch, Jeannette, 2015. "Promises and Social Distance in Buyer-Determined Procurement Auctions," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112892, Verein für Socialpolitik / German Economic Association.
    3. Bodo Sturm & Joachim Weimann, 2006. "Experiments in Environmental Economics and Some Close Relatives," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 419-457, July.
    4. Hoffmann, Sönke & Mihm, Benedikt & Weimann, Joachim, 2015. "To commit or not to commit? An experimental investigation of pre-commitments in bargaining situations with asymmetric information," Journal of Public Economics, Elsevier, vol. 121(C), pages 95-105.
    5. Sönke Hoffmann & Benedikt Mihm & Joachim Weimann, 2014. "To Commit or not to Commit? An Experimental Investigation of Pre-Commitments in Bargaining Situations with Asymmetric Information," CESifo Working Paper Series 4835, CESifo.
    6. Molenmaker, Welmer E. & de Kwaadsteniet, Erik W. & van Dijk, Eric, 2014. "On the willingness to costly reward cooperation and punish non-cooperation: The moderating role of type of social dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 125(2), pages 175-183.
    7. Andersson, Ola & Wengström, Erik, 2012. "Credible communication and cooperation: Experimental evidence from multi-stage Games," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 207-219.
    8. Mohlin, Erik & Johannesson, Magnus, 2008. "Communication: Content or relationship?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 409-419, March.
    9. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    10. Petra Nieken & Patrick W. Schmitz, 2023. "Contracting under asymmetric information and externalities: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 26(5), pages 989-1021, November.
    11. Messner, Dirk & Guarín, Alejandro & Haun, Daniel, 2013. "The Behavioural Dimensions of International Cooperation," Global Cooperation Research Papers 1, University of Duisburg-Essen, Käte Hamburger Kolleg / Centre for Global Cooperation Research (KHK/GCR21).
    12. Zultan, Ro’i, 2012. "Strategic and social pre-play communication in the ultimatum game," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 425-434.
    13. Brosig-Koch, Jeannette & Heinrich, Timo, 2018. "The role of communication content and reputation in the choice of transaction partners," Games and Economic Behavior, Elsevier, vol. 112(C), pages 49-66.
    14. Weimann Joachim, 2015. "Die Rolle von Verhaltensökonomik und experimenteller Forschung in Wirtschaftswissenschaft und Politikberatung," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(3), pages 231-252, October.
    15. Gary Bolton & Jeannette Brosig-Koch, 2012. "How do coalitions get built? Evidence from an extensive form coalition game with and without communication," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(3), pages 623-649, August.
    16. Bershadskyy, Dmitri & Sachs, Florian E. & Weimann, Joachim, 2023. "Collective bargaining in a shrinking group game: The role of information and communication," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 391-410.
    17. Kroll, Eike B. & Morgenstern, Ralf & Neumann, Thomas & Schosser, Stephan & Vogt, Bodo, 2014. "Bargaining power does not matter when sharing losses – Experimental evidence of equal split in the Nash bargaining game," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 261-272.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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