Break-offs in Bargaining, Evidence from a Video Experiment
AbstractIn this paper we report on a new methodology of observing subjects behavior in a laboratory situation: Videotaping groups of subjects who have to perform a common task provides information on decision processes that cannot be obtained by another method. We conducted a videotaped bargaining experiment in order to gain information on the emergence of break offs in negotiations. Field studies as well as experiments show that break offs are a nonnegligible phenomenon in bargaining. There is an extended literature on the question whether these findings can be explained within the game theoretic framework assuming individual rational players being guided only by economic or whether one has to assume also noneconomic motivating factors. Analyzing the transcripts reveals that potential break offs are discussed in all sessions and not only in those ending by a breakdown. Moreover, subjects are guided by economic and noneconomic motivations. In addition to the monetary aspect, concepts are to be considered which have been developed in psychology, i.e. negative reciprocity, and power. Based on these findings we present a motivational explanation of potential and actual break offs showing that emotions, especially anger, cause subjects to re-evaluate the outcome of the game. Excerpts of group discussions (translated into English) in a session ending by break off are to be found in the Appendix.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie B with number 402.
Date of creation: Feb 1997
Date of revision: May 1997
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Bargaining experiments; video experiments; break offs; motivation; negative reciprocity; power; emotions;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
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- Ronald Bosman & Frans A.A.M. van Winden, 1999.
"The Behavioral Impact of Emotions in a Power to take Game: An Experimental Study,"
Tinbergen Institute Discussion Papers
99-039/1, Tinbergen Institute.
- Ronald Bosman & Frans van Winden, 2000. "The Behavioral Impact of Emotions in a Power-to-Take Game: An Experimental Study," CESifo Working Paper Series 328, CESifo Group Munich.
- Frank, Bjorn, 1998. "Good news for experimenters: subjects do not care about your welfare," Economics Letters, Elsevier, vol. 61(2), pages 171-174, November.
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