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Walking the talk in multiparty bargaining: An experimental investigation

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  • McGinn, Kathleen L.
  • Milkman, Katherine L.
  • Nöth, Markus

Abstract

We study the framing effects of communication on payoffs in multiparty bargaining. Communication has been shown to be more truthful and revealing than predicted in equilibrium. Because talk is preference-revealing, it may effectively frame bargaining around a logic of fairness or competition, moving parties on a path toward or away from equal-division agreements. These endogenous framing effects may outweigh any overall social utility effects due to the mere presence of communication. In two studies, we find that non-binding talk about fairness within a three-party, complete-information game leads toward off-equilibrium, equal division payoffs, while non-binding talk focusing on Competitive Reasoning moves parties away from equal divisions. Our two studies allow us to demonstrate that manipulated pre-game talk and spontaneous within-game dialogue lead to the same results.

Suggested Citation

  • McGinn, Kathleen L. & Milkman, Katherine L. & Nöth, Markus, 2012. "Walking the talk in multiparty bargaining: An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 278-291.
  • Handle: RePEc:eee:joepsy:v:33:y:2012:i:1:p:278-291
    DOI: 10.1016/j.joep.2011.10.008
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    More about this item

    Keywords

    Communication; Fairness; Bargaining; Negotiations;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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