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Delegated bargaining in a competitive agent market: an experimental study

Author

Listed:
  • Amy K. Choy

    (Washington University)

  • John R. Hamman

    () (Florida State University)

  • Ronald R. King

    (Washington University)

  • Roberto A. Weber

    (University of Zurich)

Abstract

Abstract We examine a variant of ultimatum bargaining in which principals may delegate their proposal decision to agents hired from a competitive market. Contrary to several prior studies, we find that when principals must use agents, the resulting proposals are significantly higher than when principals make proposals themselves. In reconciling our results with prior findings, we conclude that both the rejection power afforded to responders and the structure of principal-agent contracts can play significant roles in the nature of outcomes under delegated bargaining.

Suggested Citation

  • Amy K. Choy & John R. Hamman & Ronald R. King & Roberto A. Weber, 2016. "Delegated bargaining in a competitive agent market: an experimental study," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 2(1), pages 22-35, May.
  • Handle: RePEc:spr:jesaex:v:2:y:2016:i:1:d:10.1007_s40881-015-0015-1 DOI: 10.1007/s40881-015-0015-1
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    References listed on IDEAS

    as
    1. Kriss, Peter H. & Nagel, Rosemarie & Weber, Roberto A., 2013. "Implicit vs. explicit deception in ultimatum games with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 337-346.
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    4. Fershtman, Chaim & Gneezy, Uri, 2001. "Strategic Delegation: An Experiment," RAND Journal of Economics, The RAND Corporation, pages 352-368.
    5. John R. Hamman & George Loewenstein & Roberto A. Weber, 2010. "Self-Interest through Delegation: An Additional Rationale for the Principal-Agent Relationship," American Economic Review, American Economic Association, pages 1826-1846.
    6. Fershtman, Chaim & Gneezy, Uri, 2001. "Strategic Delegation: An Experiment," RAND Journal of Economics, The RAND Corporation, pages 352-368.
    7. Björn Bartling & Urs Fischbacher, 2012. "Shifting the Blame: On Delegation and Responsibility," Review of Economic Studies, Oxford University Press, pages 67-87.
    8. Schotter, Andrew & Zheng, Wei & Snyder, Blaine, 2000. "Bargaining Through Agents: An Experimental Study of Delegation and Commitment," Games and Economic Behavior, Elsevier, vol. 30(2), pages 248-292, February.
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    More about this item

    Keywords

    Bargaining; Delegation; Experiment;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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