 Pre-commitment in bargaining with endogenous credibilityZhuoqiong Chen, Ruixin Wang and Jichuan Zong Journal of Economic Behavior & Organization, 2024, vol. 227, issue C Abstract: We study whether negotiators adopt commitment tactics in bargaining, a concept first proposed by Schelling (1956), and their choice of the credibility of commitment. In a modified ultimatum game experiment, the responder is allowed to pre-commit to a minimum acceptable offer (MAO) before an offer is proposed. Meanwhile, they choose the credibility of the commitment, measured by a cost of backing down (CBD) incurred if the responder accepts an offer lower than the MAO. We find that nearly 40% of responders chose a CBD substantially lower than their MAO, despite the fact that proposers were more likely to cave in and offer a larger share of the bargaining surplus when fully credible commitments were made. Informing responders of the proposers' minimum acceptable share of the bargaining surplus does not reduce partially credible commitments, suggesting that these commitments were unlikely made to enlarge the contract zone. Further treatments and analyses suggest that other-regarding preferences may be the reason behind partially credible commitments. Keywords: Commitment tactic; Bargaining; Credibility; Gender difference; Other-regarding Preferences (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:jeborg:v:227:y:2024:i:c:s0167268124003287 DOI: 10.1016/j.jebo.2024.106714 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 |
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