Walking the Talk in Multiparty Bargaining: An Experimental Investigation

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Operations, Information and Decisions Papers
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communication
fairness
bargaining
negotiations
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Other Communication
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McGinn, Kathleen L
Milkman, Katherine L
Noth, Markus
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We study the framing effects of communication on payoffs 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 studies, we find that non-binding talk about 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 manipulated pre-game talk and spontaneous within-game dialogue lead to the same results.

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2012-02-01
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Journal of Economic Psychology
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