On the Value of Transparency and Information Acquisition in Bargaining*

Thomas Gehrig, René Levínský () and Güth Werner
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Güth Werner: Libera Universita Internazionale degli Studi Sociali Guido Carli, Frankfurt School of Finance and Management, Max Planck Institute for Research on Collective Goods,Roma, Italy

German Economic Review, 2016, vol. 17, issue 3, 337-358

Abstract: We analyze how transparency affects information acquisition in a bargaining context where proposers may choose to purchase information about the unknown outside options of their bargaining partners. Although information acquisition is excessive in all scenarios, we find that bargaining outcomes depend crucially on the transparency of the bargaining environment. In transparent games, when responders can observe whether proposers have acquired information, acceptance rates are higher. Accordingly, in transparent bargaining environments, information is more valuable, both individually and socially.

Keywords: Information acquisition; ultimatum experiment; transparency (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1111/geer.12101

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