Asymmetric information in simple bargaining games: An experimental study

Charlotte Klempt, Kerstin Pull and Manfred Stadler

No 97, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: Bilateral bargaining situations are often characterized by informational asymmetries concerning the size of what is at stake: in some cases, the proposer is better informed, in others, it is the responder. We analyze the effects of both types of asymmetric information on proposer behavior in two different situations which allow for a variation of responder veto power: the ultimatum and the dictator game. We find that the extent to which proposers demand less in the ultimatum as compared to the dictator game is (marginally) smaller when the proposer is in the superior information position. Further we find informed proposers to exploit their informational advantage by offering an amount that does not reveal the true size of the pie, with proposers in the ultimatum game exhibiting this behavioral pattern to a larger extent than those in the dictator game. Uninformed proposers risk imposed rejection when they ask for more than potentially is at stake, and ask for a risk premium in dictator games. We concentrate on proposers, but also explore responder behavior: We find uninformed responders to enable proposers' hiding behavior, and we find proposer intentionality not to play an important role for informed responders when they decide whether to accept or reject an offer by an (uninformed) proposer.

Keywords: Bargaining; Information; Experimental Games (search for similar items in EconPapers)
JEL-codes: C72 C91 D03 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe and nep-ore
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Asymmetric Information in Simple Bargaining Games: An Experimental Study (2019)
Journal Article: Asymmetric Information in Simple Bargaining Games: An Experimental Study (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:97

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