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Walking the Talk in Multiparty Bargaining: An Experimental Investigation

Author

Listed:
  • Kathleen L. McGinn

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

  • Katherine L. Milkman

    (Wharton School, University of Pennsylvania)

  • Markus Nöth

    (Universität Hamburg,)

Abstract

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.

Suggested Citation

  • Kathleen L. McGinn & Katherine L. Milkman & Markus Nöth, 2009. "Walking the Talk in Multiparty Bargaining: An Experimental Investigation," Harvard Business School Working Papers 10-039, Harvard Business School.
  • Handle: RePEc:hbs:wpaper:10-039
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    References listed on IDEAS

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    More about this item

    Keywords

    communication; fairness; bargaining;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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