Cooling-Off in Negotiations - Does It Work?

Jörg Oechssler, Andreas Roider and Patrick Schmitz

No 463, Working Papers from University of Heidelberg, Department of Economics

Abstract: Negotiations frequently end in conflict after one party rejects a final offer. In a large-scale internet experiment, we investigate whether a 24-hour cooling-off period leads to fewer rejections in ultimatum bargaining. We conduct a standard cash treatment and a lottery treatment, where subjects receive lottery tickets for several large prizes - emulating a high-stakes environment. In the lottery treatment, unfair offers are less frequently rejected, and cooling-off significantly reduces the rejection rate further. In the cash treatment, rejections are more frequent and remain so after cooling-off. This treatment difference is particularly pronounced for subjects with lower cognitive abilities.

Keywords: negotiations; ultimatum game; emotions; cooling-off; cognitive abilities; behavioral biases; internet experiment (search for similar items in EconPapers)
JEL-codes: C78 C99 D8 (search for similar items in EconPapers)
Date: 2009-05-12
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Cooling Off in Negotiations: Does it Work? (2015)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2008)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2008)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:awi:wpaper:0463

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