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The Role of Information in Different Bargaining Protocols

Author

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  • Rafael Hortala-Vallve

    (Government Department, London School of Economics)

  • Aniol Llorente-Saguer

    (Max Planck Institute for Research on Collective Goods, Bonn)

  • Rosemarie Nagel

    (Universitat Pompeu Fabra, ICREA)

Abstract

We analyze a bargaining protocol recently proposed in the literature vis-à-vis unconstrained negotiation. This new mechanism extracts “gains from trade” inherent in the differing valuation of two parties towards various issues where conflict exists. We assess the role of incomplete vs. complete information in the efficiency achieved by this new mechanism and by unconstrained negotiation. We find that unconstrained negotiation does best under a situation of complete information where the valuations of both bargaining parties are common knowledge. Instead, the newly proposed mechanism does best in a situation with incomplete information. The sources of inefficiencies in each of the two cases arise from the different strategic use of the available information.

Suggested Citation

  • Rafael Hortala-Vallve & Aniol Llorente-Saguer & Rosemarie Nagel, 2012. "The Role of Information in Different Bargaining Protocols," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_12, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2012_12
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    References listed on IDEAS

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    Cited by:

    1. Duk Gyoo Kim, 2020. "Clustering Standard Errors at the "Session" Level," CESifo Working Paper Series 8386, CESifo.
    2. Duffy, John & Matros, Alexander, 2017. "Stochastic asymmetric Blotto games: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 88-105.
    3. Shupp Robert & Cadigan John & Schmitt Pamela M. & Swope Kurtis J., 2013. "Institutions and information in multilateral bargaining experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(1), pages 485-524, June.
    4. Rafael Hortala-Vallve & Aniol Llorente-Saguer, 2015. "An Experiment on Non-Zero Sum Colonel Blotto Games," Working Papers 779, Queen Mary University of London, School of Economics and Finance.

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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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