Communication in multilateral bargaining
- Creators
- Agranov, Marina
- Tergiman, Chloe
Abstract
One of the most robust phenomena in the experimental literature on multilateral bargaining is the failure of proposers to extract equilibrium rents. However, all previous experiments have overlooked the fact that outside the lab committee members are allowed to – and do – engage in sometimes intense communication processes prior to voting on a proposal. We conduct an experimental test of the Baron–Ferejohn model in which we allow committee members to engage in unrestricted cheap-talk communication before a proposal is submitted. We find that proposers extract a significantly higher share of resources when communication is allowed. Communication increases proposer power through two channels. First, it mitigates the uncertainty surrounding the amount a coalition member is willing to accept. Second, it allows potential coalition members to compete for a place in the coalition by lowering this stated price.
Additional Information
© 2014 Elsevier B.V. Received 19 September 2013; Received in revised form 30 May 2014; Accepted 7 June 2014; Available online 26 June 2014. The authors would like to acknowledge that this research was generously supported by the Social Sciences and Humanities Research Council as well as the Gordon and Betty Moore Foundation Grant GBMF#1158 ("Experimentation with Large, Diverse and Interconnected Socio-Economic Systems"). We would also like to thank Ernesto Dal Bo, Pedro Dal Bo, Timothy Feddersen, Guillaume Frechette, Alessandro Lizerri, John Ledyard, Rebecca Morton, Muriel Niederle, Salvatore Nunnari, Erkut Ozbay, Thomas Palfrey, Al Roth, Emanuel Vespa, Alistair Wilson, Leeat Yariv, the seminar participants at the Pennsylvania State University, Caltech, UBC, Stanford and UCSD, the conference participants at ESA (Tucson and New York), SITE, and Public Choice for helpful comments and discussions. Formerly SSWP 1378.Attached Files
Submitted - cheaptalkbargaining.pdf
Supplemental Material - mmc1.pdf
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Additional details
- Eprint ID
- 51048
- DOI
- 10.1016/j.jpubeco.2014.06.006
- Resolver ID
- CaltechAUTHORS:20141030-090720806
- Social Sciences and Humanities Research Council (SSHRC)
- GBMF 1158
- Gordon and Betty Moore Foundation
- Created
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2014-10-30Created from EPrint's datestamp field
- Updated
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2021-11-10Created from EPrint's last_modified field