The Attraction and Compromise Effects in Bargaining: Experimental Evidence

Fabio Galeotti (), Maria Montero and Anders Poulsen ()
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Fabio Galeotti: Université de Lyon, CNRS, GATE UMR 5824, Ecully F-69130, France
Anders Poulsen: School of Economics and Centre for Behavioural and Experimental Social Science (CBESS), University of East Anglia, Norwich NR4 7TJ, United Kingdom

Management Science, 2022, vol. 68, issue 4, 2987-3007

Abstract: We experimentally investigate, in an unstructured bargaining environment with commonly known money payoffs, the attraction effect and compromise effect (AE and CE) in bargaining, namely, a tendency for bargainers to agree to an intermediate option (CE) or to an option that dominates another option (AE). We conjecture that the relevance of the AE and CE in bargaining is constrained by how focal the feasible agreements’ payoffs are. We indeed observe that there are significant AEs and CEs, but these effects are mediated by the efficiency and equality properties of the feasible agreements. Due to the allure of equality, the effects are harder to observe when an equal earnings contract is available. Decoys are more effective in shifting agreements from a very unequal contract to a less unequal one rather than the reverse.

Keywords: bargaining; attraction effect; compromise effect; focality; equality; efficiency (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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http://dx.doi.org/10.1287/mnsc.2021.4025 (application/pdf)

Related works:
Working Paper: The Attraction and Compromise Effects in Bargaining: Experimental Evidence (2022)
Working Paper: The Attraction and Compromise Effects in Bargaining: Experimental Evidence (2020)
Working Paper: The Attraction and Compromise Effects in Bargaining: Experimental Evidence (2018)
Working Paper: The Attraction and Compromise Effects in Bargaining: Experimental Evidence (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:68:y:2022:i:4:p:2987-3007

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