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Does Resorting to Online Dispute Resolution Promote Agreements? Experimental Evidence

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Author Info
Yannick Gabuthy (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I)
Nicolas Jacquemet () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
Nadège Marchand (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)

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Abstract

This paper presents an experiment performed to test the properties of an innovativebargaining mechanism (called automated negotiation) used to resolve disputes arising fromInternet-based transactions. The main result shows that the settlement rule tends to chillbargaining as it creates incentives for individuals to misrepresent their true valuations, whichimplies that automated negotiation is not able to promote agreements. However, this perverseeffect depends strongly on the conflict situation. When the threat that a disagreement occurs ismore credible, the strategic effect is reduced since defendants are more interested inmaximizing the efficiency of a settlement than their own expected profit. The implications ofthese results are then used to discuss the potential role of public regulation and reputationmechanisms in Cyberspace

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00259453_v1.

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Date of creation: 2008
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Publication status: Published, European Economic Review, 2008, 52, 2, 259-282
Handle: RePEc:hal:cesptp:halshs-00259453_v1

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Keywords: : Online Dispute Resolution; Electronic Commerce; Bargaining; Arbitration; Experimental Economics;

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