Communication in multilateral bargaining with joint production

Andrzej Baranski () and Caleb A. Cox ()
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Andrzej Baranski: Division of Social Science, New York University Abu Dhabi
Caleb A. Cox: Virginia Commonwealth University

Experimental Economics, 2023, vol. 26, issue 1, No 3, 55-77

Abstract: Abstract We experimentally investigate the effect of pre-bargaining communication on productive incentives in a multilateral bargaining game with joint production under two conditions: observable and unobservable investments. In both conditions, communication fosters fair sharing and is rarely used to pit individuals against each other. Proportional sharing arises with observable investments with or without communication, leading to high efficiency gains. Without investment observability, communication is widely used to truthfully report investments and call for equitable sharing, allowing substantial efficiency gains. Since communication occurs after production, our results highlight a novel indirect channel through which communication can enhance efficiency in social dilemmas. Our results contrast with previous findings on bargaining over an exogenous fund, where communication leads to highly unequal outcomes, competitive messages, and virtually no appeals to fairness.

Keywords: Multilateral bargaining; Communication; Profit sharing (search for similar items in EconPapers)
JEL-codes: C78 D71 D72 H41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10683-022-09760-z

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