IDEAS home Printed from https://ideas.repec.org/p/cir/cirwor/2018s-08.html
   My bibliography  Save this paper

Bargaining and the Role of Negotiators’ Competitiveness

Author

Listed:
  • Claudia Keser
  • Stephan Müller
  • Emmanuel Peterlé
  • Holger A. Rau

Abstract

This paper experimentally tests the relation between subjects’ competitiveness and bargaining behavior. Bargaining is investigated in a demand-ultimatum game, where the responder can request a share of the pie from the proposer. The re-sults show that highly competitive proposers earn less, since they make lower o?ers, which are more often rejected. Similarly, highly competitive responders achieve lower payo?s, since they request excessive amounts which induces lower proposals. These ?ndings establish a link between competitiveness and bargaining as suggested by social and evolutionary psychology. Thus, we identify one driver of the empirical heterogeneity of bargaining behavior and outcomes. From a management perspec-tive our ?ndings highlight that giving thought to employees’ competitiveness before delegating them to participate in negotiations may pay o?.

Suggested Citation

  • Claudia Keser & Stephan Müller & Emmanuel Peterlé & Holger A. Rau, 2018. "Bargaining and the Role of Negotiators’ Competitiveness," CIRANO Working Papers 2018s-08, CIRANO.
    • Handle: RePEc:cir:cirwor:2018s-08
    as

    Download full text from publisher

    File URL: https://cirano.qc.ca/files/publications/2018s-08.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jordi Brandts & Gary Charness, 2011. "The strategy versus the direct-response method: a first survey of experimental comparisons," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 375-398, September.
    2. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
    3. Bajari, Patrick & Tadelis, Steven, 2001. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 387-407, Autumn.
    4. Svejnar, Jan, 1986. "Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry," Econometrica, Econometric Society, vol. 54(5), pages 1055-1078, September.
    5. Budd, John W & Na, In-Gang, 2000. "The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 783-807, October.
    6. Andreas Leibbrandt & John A. List, 2015. "Do Women Avoid Salary Negotiations? Evidence from a Large-Scale Natural Field Experiment," Management Science, INFORMS, vol. 61(9), pages 2016-2024, September.
    7. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    8. Castillo, Marco & Petrie, Ragan & Torero, Maximo & Vesterlund, Lise, 2013. "Gender differences in bargaining outcomes: A field experiment on discrimination," Journal of Public Economics, Elsevier, vol. 99(C), pages 35-48.
    9. Guth, Werner & Huck, Steffen & Muller, Wieland, 2001. "The Relevance of Equal Splits in Ultimatum Games," Games and Economic Behavior, Elsevier, vol. 37(1), pages 161-169, October.
    10. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, September.
    11. Barry Gerhart, 1990. "Gender Differences in Current and Starting Salaries: The Role of Performance, College Major, and Job Title," ILR Review, Cornell University, ILR School, vol. 43(4), pages 418-433, July.
    12. Muriel Niederle & Carmit Segal & Lise Vesterlund, 2013. "How Costly Is Diversity? Affirmative Action in Light of Gender Differences in Competitiveness," Management Science, INFORMS, vol. 59(1), pages 1-16, May.
    13. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    14. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    15. Gneezy, Uri & Haruvy, Ernan & Roth, Alvin E., 2003. "Bargaining under a deadline: evidence from the reverse ultimatum game," Games and Economic Behavior, Elsevier, vol. 45(2), pages 347-368, November.
    16. Dana, James D., 2012. "Buyer groups as strategic commitments," Games and Economic Behavior, Elsevier, vol. 74(2), pages 470-485.
    17. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, vol. 72(2), pages 321-338, June.
    18. Terry A. Taylor, 2002. "Supply Chain Coordination Under Channel Rebates with Sales Effort Effects," Management Science, INFORMS, vol. 48(8), pages 992-1007, August.
    19. Matthew Grennan, 2014. "Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices," Management Science, INFORMS, vol. 60(12), pages 3011-3025, December.
    20. Harrington, Joseph E, Jr, 1990. "The Role of Risk Preferences in Bargaining When Acceptance of a Proposal Requires Less than Unanimous Approval," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 135-154, June.
    21. John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 41-71.
    22. 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.
    23. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    24. Charness, Gary & Gneezy, Uri, 2012. "Strong Evidence for Gender Differences in Risk Taking," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 50-58.
    25. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asad Islam & Sakiba Tasneem & Liang Choon Wang, 2023. "Fishermen’s competitiveness and labour market performance: Evidence from shrimpers in Bangladesh," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(3), pages 346-363, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peterlé, Emmanuel & Rau, Holger A., 2017. "Gender differences in competitive positions: Experimental evidence on job promotion," University of Göttingen Working Papers in Economics 303, University of Goettingen, Department of Economics.
    2. Kessel, Dany & Mollerstrom, Johanna & van Veldhuizen, Roel, 2021. "Can simple advice eliminate the gender gap in willingness to compete?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138, pages 1-1.
    3. Justus Haucap & Christina Heldman & Holger A. Rau, 2022. "Gender and Cooperation in the Presence of Negative Externalities," CESifo Working Paper Series 9614, CESifo.
    4. Perodaud, Maxime & Hanaki, Nobuyuki & Yamada, Takashi, 2022. "An experimental analysis of gender discrimination in a credence goods market," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 98(C).
    5. Cueva, Carlos & Rustichini, Aldo, 2015. "Is financial instability male-driven? Gender and cognitive skills in experimental asset markets," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 330-344.
    6. Rau, Holger, 2019. "Gender Differences in Bargaining: Evidence from a TV Show," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203637, Verein für Socialpolitik / German Economic Association.
    7. Huang, Jennie & Low, Corinne, 2022. "The myth of the male negotiator: Gender’s effect on negotiation strategies and outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 517-532.
    8. Difang Huang & Zhengyang Bao, 2020. "Gender Differences in Reaction to Enforcement Mechanisms: A Large-Scale Natural Field Experiment," Monash Economics Working Papers 08-20, Monash University, Department of Economics.
    9. Zhengyang Bao & Andreas Leibbrandt, 2020. "Tournaments with Safeguards: A Blessing or a Curse for Women?," Monash Economics Working Papers 02-20, Monash University, Department of Economics.
    10. Haucap, Justus & Heldman, Christina & Rau, Holger A., 2022. "Gender and collusion," DICE Discussion Papers 380, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    11. Carlos Alós-Ferrer & Jaume García-Segarra & Alexander Ritschel, 2018. "The Big Robber Game," ECON - Working Papers 291, Department of Economics - University of Zurich.
    12. Cornaglia, Francesca & Drouvelis, Michalis & Masella, Paolo, 2019. "Competition and the role of group identity," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 136-145.
    13. Buser, Thomas & Ranehill, Eva & van Veldhuizen, Roel, 2021. "Gender differences in willingness to compete: The role of public observability," Journal of Economic Psychology, Elsevier, vol. 83(C).
    14. Grossman, Philip J. & Eckel, Catherine & Komai, Mana & Zhan, Wei, 2019. "It pays to be a man: Rewards for leaders in a coordination game," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 197-215.
    15. Agnès Festré, 2019. "On the Nature of Fair Behaviour: Further Evidence," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 36(3), pages 193-207, December.
    16. Katarína Danková & Hodaka Morita & Maroš Servátka & Le Zhang, 2022. "Fairness concerns and job assignment to positions with different surplus," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1490-1516, April.
    17. Iriberri, Nagore & Hernandez-Arenaz, Iñigo, 2022. "Gender Differences in Alternating-Offer Bargaining: An Experimental Study," CEPR Discussion Papers 12561, C.E.P.R. Discussion Papers.
    18. Helena Fornwagner & Monika Pompeo & Nina Serdarevic, 2023. "Choosing Competition on Behalf of Someone Else," Management Science, INFORMS, vol. 69(3), pages 1555-1574, March.
    19. Matthias Sutter & Daniela Glätzle-Rützler, 2015. "Gender Differences in the Willingness to Compete Emerge Early in Life and Persist," Management Science, INFORMS, vol. 61(10), pages 2339-23354, October.
    20. Kerstin Grosch & Stephan Müller & Holger A. Rau & Lilia Wasserka-Zhurakhovska, 2020. "Gender Differences in Dishonesty Disappear When Leaders Make Decisions on Behalf of Their Team," CESifo Working Paper Series 8514, CESifo.

    More about this item

    Keywords

    Bargaining; Competitiveness; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2018s-08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/ciranca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.