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Learning to bargain


  • Harbaugh, William T.
  • Krause, Kate
  • Vesterlund, Lise


This paper studies how children learn to bargain. We performed simple anonymous bargaining experiments with real payoffs with 256 children from age 8 to 18. On average, offers by even the youngest children were close to optimal, given the responses. Both offers and responses were similar to the results that others have reported for adults. Younger children showed more variance in the size of proposals. Children showed clear evidence of reinforcement learning, responding to a rejection by increasing subsequent proposals. This pattern was strongest for the youngest children, who tended to over-react to rejections. We found mixed support for social cognitive theory: while proposals increased after other children made larger proposals, they did not increase after proposals by others were rejected.
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  • Harbaugh, William T. & Krause, Kate & Vesterlund, Lise, 2007. "Learning to bargain," Journal of Economic Psychology, Elsevier, vol. 28(1), pages 127-142, January.
  • Handle: RePEc:eee:joepsy:v:28:y:2007:i:1:p:127-142

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    References listed on IDEAS

    1. W. Guth & R. Schmittberger & B. Schwartz, 2010. "An experimental analysis of ultimatum bargaining," Levine's Working Paper Archive 291, David K. Levine.
    2. Murnighan, J. Keith & Saxon, Michael Scott, 1998. "Ultimatum bargaining by children and adults," Journal of Economic Psychology, Elsevier, vol. 19(4), pages 415-445, August.
    3. John, Deborah Roedder, 1999. " Consumer Socialization of Children: A Retrospective Look at Twenty-Five Years of Research," Journal of Consumer Research, Oxford University Press, vol. 26(3), pages 183-213, December.
    4. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, vol. 66(3), pages 569-596, May.
    5. Nick Feltovich & John Duffy, 1999. "Does observation of others affect learning in strategic environments? An experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(1), pages 131-152.
    6. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-1095, December.
    7. Gregan-Paxton, Jennifer & John, Deborah Roedder, 1995. " Are Young Children Adaptive Decision Makers? A Study of Age Differences in Information Search Behavior," Journal of Consumer Research, Oxford University Press, vol. 21(4), pages 567-580, March.
    8. Cameron, Lisa A, 1999. "Raising the Stakes in the Ultimatum Game: Experimental Evidence from Indonesia," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 47-59, January.
    9. 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.
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    Cited by:

    1. Sabrina Bruyneel & Laurens Cherchye & Sam Cosaert & Bram De Rock & Siegfried Dewitte, 2012. "Are the Smart Kids More Rational ?," Working Papers ECARES ECARES 2012-050, ULB -- Universite Libre de Bruxelles.
    2. Ilaria Castelli & Davide Massaro & Alan Sanfey & Antonella Marchetti, 2010. "Fairness and intentionality in children’s decision-making," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(3), pages 269-288, September.
    3. Alexander Cappelen & John List & Anya Samek & Bertil Tungodden, 2016. "The Effect of Early Education on Social Preferences," Framed Field Experiments 00584, The Field Experiments Website.
    4. Bucciol, Alessandro & Piovesan, Marco, 2011. "Luck or cheating? A field experiment on honesty with children," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 73-78, February.
    5. Owens, Mark F., 2011. "Do other-regarding preferences change with age? Evidence from a gift exchange experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 868-878.
    6. Parco, James E. & Murphy, Ryan O., 2013. "Resistance to truthful revelation in bargaining: Persistent bid shading and the play of dominated strategies," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 154-170.
    7. Almås, Ingvild & Cappelen, Alexander W. & Sørensen, Erik Ø. & Tungodden, Bertil, 2015. "Fairness and the Development of Inequality Acceptance," Discussion Paper Series in Economics 18/2015, Norwegian School of Economics, Department of Economics.
    8. Catherine Eckel & Philip Grossman & Cathleen Johnson & Angela Oliveira & Christian Rojas & Rick Wilson, 2012. "School environment and risk preferences: Experimental evidence," Journal of Risk and Uncertainty, Springer, vol. 45(3), pages 265-292, December.
    9. Ingvild Almås & Alexander W Cappelen & Kjell G Salvanes & Erik Ø Sørensen & Bertil Tungodden, 2017. "Fairness and family background," Politics, Philosophy & Economics, , vol. 16(2), pages 117-131, May.
    10. Cotton, Christopher & McIntyre, Frank & Price, Joseph, 2013. "Gender differences in repeated competition: Evidence from school math contests," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 52-66.
    11. Bucher-Koenen, Tabea & Schmidt, Carsten, 2011. "Time (In)Consistent Food Choice of Children and Teenagers," MEA discussion paper series 11251, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.

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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General


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