 To reveal or not to reveal? Strategic disclosure of private information in negotiationChing Chyi Lee and Michael J. Ferguson European Journal of Operational Research, 2010, vol. 207, issue 1, 380-390 Abstract: Within the bargaining literature, it is widely held that negotiators should never reveal information that will lead to disclosure of their reservation prices. We analyze a simple bargaining and search model in which the informed buyer can choose to reveal his cost of searching for an outside price (which determines his reservation price) to the uninformed seller. We demonstrate that buyers can be made better off by revealing their search cost. More interestingly, we also find that, depending on the assumed distribution of search costs, sometimes buyers with relatively low search costs should reveal their private information whereas in other cases buyers with relatively high search costs should do so. We then test our model experimentally and find that subjects' behavior is not entirely consistent with theoretical predictions. In general, bargainers' behavior is better explained by a bounded rationality model similar to "fictitious play". Keywords: Group; decisions; and; negotiations; Game; theory; Bounded; rationality; History-consistent; rationality; Experimental; economics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:207:y:2010:i:1:p:380-390 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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