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How Communication Links Influence Coalition Bargaining: A Laboratory Investigation

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  • Gary E. Bolton

    () (Smeal College of Business, Penn State University, University Park, Pennsylvania 16802, and Graduate School of Business Administration, Harvard University, Cambridge, Massachusetts 02139)

  • Kalyan Chatterjee

    () (Department of Economics, Penn State University, University Park, Pennsylvania 16802)

  • Kathleen L. McGinn

    () (Graduate School of Business Administration, Harvard University, Cambridge, Massachusetts 02139)

Abstract

Complexity of communication is one of the important factors that distinguishes multilateral negotiation from its bilateral cousin. We investigate how the communication configuration affects a three-person coalition negotiation. Restricting who can communicate with whom strongly influences outcomes, and not always in ways that current theory anticipates. Competitive frictions, including a tendency to communicate offers privately, appear to shape much of what we observe. Our results suggest that parties with weaker alternatives would benefit from a more constrained structure, especially if they can be the conduit of communication, while those endowed with stronger alternatives would do well to work within a more public communication structure that promotes competitive bidding.

Suggested Citation

  • Gary E. Bolton & Kalyan Chatterjee & Kathleen L. McGinn, 2003. "How Communication Links Influence Coalition Bargaining: A Laboratory Investigation," Management Science, INFORMS, vol. 49(5), pages 583-598, May.
  • Handle: RePEc:inm:ormnsc:v:49:y:2003:i:5:p:583-598
    DOI: 10.1287/mnsc.49.5.583.15148
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    File URL: http://dx.doi.org/10.1287/mnsc.49.5.583.15148
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Maria Montero & Martin Sefton & Ping Zhang, 2008. "Enlargement and the balance of power: an experimental study," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 69-87, January.
    2. Okada, Akira & Riedl, Arno, 2005. "Inefficiency and social exclusion in a coalition formation game: experimental evidence," Games and Economic Behavior, Elsevier, vol. 50(2), pages 278-311, February.
    3. Cesar Martinelli & Thomas R. Palfrey, 2017. "Communication and Information in Games of Collective Decision: A Survey of Experimental Results," Working Papers 1065, George Mason University, Interdisciplinary Center for Economic Science.
    4. 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.
    5. repec:eee:gamebe:v:111:y:2018:i:c:p:41-63 is not listed on IDEAS
    6. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
    7. Matthew McGinty & Garrett Milam & Alejandro Gelves, 2012. "Coalition Stability in Public Goods Provision: Testing an Optimal Allocation Rule," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 327-345, July.
    8. Arleta Rasmußen, 2014. "The influence of face-to-face communication: a principal-agent experiment," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 22(1), pages 73-88, March.
    9. Emin Karagözoglu & Martin G. Kocher, 2015. "Bargaining under Time Pressure," CESifo Working Paper Series 5685, CESifo Group Munich.
    10. Daniela Glätzle-Rützler & Philipp Lergetporer & Matthias Sutter, 2019. "Collective Intertemporal Decisions and Heterogeneity in Groups," CESifo Working Paper Series 7716, CESifo Group Munich.
    11. Gersbach, Hans & Schneider, Maik T. & Tejada, Oriol, 2019. "Coalition preclusion contracts and moderate policies," Games and Economic Behavior, Elsevier, vol. 114(C), pages 28-46.
    12. Gerben A. Kleef & Eric Dijk & Wolfgang Steinel & Fieke Harinck & Ilja Beest, 2008. "Anger in social conflict: Cross-situational comparisons and suggestions for the future," Group Decision and Negotiation, Springer, vol. 17(1), pages 13-30, January.
    13. Aguiar, Victor H. & Pongou, Roland & Tondji, Jean-Baptiste, 2018. "A non-parametric approach to testing the axioms of the Shapley value with limited data," Games and Economic Behavior, Elsevier, vol. 111(C), pages 41-63.
    14. Geoffroy de Clippel & Kareen Rozen, 2013. "Fairness through the Lens of Cooperative Game Theory: An Experimental Approach," Cowles Foundation Discussion Papers 1925, Cowles Foundation for Research in Economics, Yale University.
    15. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    16. de Groot Ruiz, Adrian & Ramer, Roald & Schram, Arthur, 2016. "Formal versus informal legislative bargaining," Games and Economic Behavior, Elsevier, vol. 96(C), pages 1-17.
    17. James E. Smith & Detlof von Winterfeldt, 2004. "Anniversary Article: Decision Analysis in Management Science," Management Science, INFORMS, vol. 50(5), pages 561-574, May.

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