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Delegated bargaining in a competitive agent market: an experimental study

Author

Listed:
  • Amy K. Choy

    (Washington University)

  • John R. Hamman

    (Florida State University)

  • Ronald R. King

    (Washington University)

  • Roberto A. Weber

    (University of Zurich)

Abstract

We examine a variant of ultimatum bargaining in which principals may delegate their proposal decision to agents hired from a competitive market. Contrary to several prior studies, we find that when principals must use agents, the resulting proposals are significantly higher than when principals make proposals themselves. In reconciling our results with prior findings, we conclude that both the rejection power afforded to responders and the structure of principal-agent contracts can play significant roles in the nature of outcomes under delegated bargaining.

Suggested Citation

  • Amy K. Choy & John R. Hamman & Ronald R. King & Roberto A. Weber, 2016. "Delegated bargaining in a competitive agent market: an experimental study," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 2(1), pages 22-35, May.
    • Handle: RePEc:spr:jesaex:v:2:y:2016:i:1:d:10.1007_s40881-015-0015-1
    DOI: 10.1007/s40881-015-0015-1
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    References listed on IDEAS

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    Cited by:

    1. Alessandro Tavoni & Ralph Winkler, 2021. "Domestic Pressure and International Climate Cooperation," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 225-243, October.
    2. Argenton, Cédric & Potters, Jan & Yang, Yadi, 2023. "Receiving credit: On delegation and responsibility," European Economic Review, Elsevier, vol. 158(C).
    3. Yuzhen Li & Jun Luo & He Niu & Hang Ye, 2023. "When punishers might be loved: fourth-party choices and third-party punishment in a delegation game," Theory and Decision, Springer, vol. 94(3), pages 423-465, April.
    4. Hagmann, David & Feiler, Daniel, 2020. "The Agent-Selection Dilemma in Distributive Bargaining," OSF Preprints y6tq2, Center for Open Science.

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    More about this item

    Keywords

    Bargaining; Delegation; Experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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