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Waiting for the Right Offer: Laboratory Evidence on How News Affects Bargaining

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  • Tingting Ding
  • Steven F. Lehrer

Abstract

We conduct a series of laboratory experiments that implement the Daley and Green (2020) model to examine whether the gradual, exogenous revelation of sellers’ private information influences the occurrence of trades in a bilateral bargaining setting with a static lemon condition. We find that while information does not increase efficiency, it reduces the likelihood that buyers incur losses when trading with low-quality sellers. Anticipating that additional signals will arrive, buyers hesitate to finalize deals immediately and exhibit a “waiting for news” effect, making sizable offer adjustments only when sufficient positive signals have accumulated. In contrast, informed sellers are less sensitive to news but appear to wait for the offer that they deem acceptable.

Suggested Citation

  • Tingting Ding & Steven F. Lehrer, 2025. "Waiting for the Right Offer: Laboratory Evidence on How News Affects Bargaining," NBER Working Papers 34543, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34543
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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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