EconPapers    
Economics at your fingertips  
 

Strategic ignorance in ultimatum bargaining

Julian Conrads and Bernd Irlenbusch

Journal of Economic Behavior & Organization, 2013, vol. 92, issue C, 104-115

Abstract: In his classic article “An Essay on Bargaining” Schelling (1956) argues that ignorance might actually be strength rather than weakness. We test and confirm Schelling's conjecture in a simple take-it-or-leave-it bargaining experiment where the proposer can choose between two possible offers. Option A always gives the proposer a higher payoff than option B. The payoff of the responder depends on the (randomly determined) state of nature. In one state payoffs of the two players are aligned whereas they are not aligned in the other state. The responder is always informed about the actual state. The proposer knows the actual state in our first treatment but not in the second. We find that proposers indeed benefit from ignorance because the responders accept almost all offers (even the unfavorable ones) if the payoffs are not transparent for the proposer. In additional treatments we investigate bargaining situations where the proposer can deliberately remain ignorant.

Keywords: Strategic ignorance; Bargaining; Intentions; Experiment (search for similar items in EconPapers)
JEL-codes: C72 C78 C91 D63 D82 D83 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268113001467
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:92:y:2013:i:c:p:104-115

DOI: 10.1016/j.jebo.2013.05.010

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-27
Handle: RePEc:eee:jeborg:v:92:y:2013:i:c:p:104-115