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Trading partner choice and bargaining culture in negotiations

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Listed:
  • Phillips, Owen R.
  • Nagler, Amy M.
  • Menkhaus, Dale J.
  • Huang, Shanshan
  • Bastian, Christopher T.

Abstract

In negotiated transactions the act of choosing trading partners and “who chooses” creates a bargaining culture that influences trading behavior. Results are presented from experimental markets in which paired buyers and sellers negotiate the repeated sale of units. Relative to a market environment in which traders are randomly matched, choosing a trading partner increases the number of units exchanged and lowers negotiated prices. Collective seller earnings suffer. Who does the choosing, that is, whether buyers select sellers or sellers select buyers, further impacts prices and therefore relative earnings. Those choosing tend to be disadvantaged.

Suggested Citation

  • Phillips, Owen R. & Nagler, Amy M. & Menkhaus, Dale J. & Huang, Shanshan & Bastian, Christopher T., 2014. "Trading partner choice and bargaining culture in negotiations," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 178-190.
    • Handle: RePEc:eee:jeborg:v:105:y:2014:i:c:p:178-190
    DOI: 10.1016/j.jebo.2014.05.005
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    References listed on IDEAS

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    Cited by:

    1. Chian Jones Ritten & Christopher Bastian & Owen Phillips, 2021. "The relative effectiveness of law enforcement policies aimed at reducing illegal trade: Evidence from laboratory markets," PLOS ONE, Public Library of Science, vol. 16(11), pages 1-20, November.

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    More about this item

    Keywords

    Negotiations; Matching; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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