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Walking the Talk in Multiparty Bargaining: An Experimental Investigation

  • Kathleen L. McGinn

    ()

    (Harvard Business School, Negotiation, Organizations & Markets Unit)

  • Katherine L. Milkman

    ()

    (Wharton School, University of Pennsylvania)

  • Markus Nöth

    ()

    (Universität Hamburg,)

We study the framing effects of communication 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 experiments, we find that non-binding talk of 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 spontaneous within-game dialogue and manipulated pre-game talk lead to the same results.

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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 10-039.

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Length: 28 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:hbs:wpaper:10-039
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