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Does Resorting to Online Dispute Resolution Promote Agreements ? Experimental Evidence

Author

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  • Yannick Gabuthy

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Jacquemet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Nadège Marchand

    (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper presents an experiment performed to test the properties of an innovative bargaining mechanism (called automated negotiation) used to resolve disputes arising from Internet-based transactions. The main result shows that the settlement rule tends to chill bargaining as it creates incentives for individuals to misrepresent their true valuations, which implies that automated negotiation is not able to promote agreements. However, this perverse effect depends strongly on the conflict situation. When the threat that a disagreement occurs is more credible, the strategic effect is reduced since defendants are more interested in maximizing the efficiency of a settlement than their own expected profit. The implications of these results are then used to discuss the potential role of public regulation and reputation mechanisms in Cyberspace.

Suggested Citation

  • Yannick Gabuthy & Nicolas Jacquemet & Nadège Marchand, 2008. "Does Resorting to Online Dispute Resolution Promote Agreements ? Experimental Evidence," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00259453, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00259453
    DOI: 10.1016/j.euroecorev.2007.04.004
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    Cited by:

    1. Yannick Gabuthy, 2023. "Blockchain-Based Dispute Resolution: Insights and Challenges," Games, MDPI, vol. 14(3), pages 1-9, April.
    2. Dickinson, David L. & McEvoy, David M. & Bruner, David M., 2022. "The impact of sleep restriction on interpersonal conflict resolution and the narcotic effect," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 71-90.
    3. Yannick Gabuthy & Nicolas Jacquemet, 2013. "Analyse économique du droit et méthode expérimentale," PSE-Ecole d'économie de Paris (Postprint) halshs-00746617, HAL.
    4. 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.
    5. repec:hal:wpaper:halshs-00746617 is not listed on IDEAS

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    More about this item

    Keywords

    Online Dispute Resolution; Electronic Commerce; Bargaining; Arbitration; Experimental Economics;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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