Communication, Reputation, and Punishment in Sequential Bargaining Experiments

Jeannette Brosig-Koch, Joachim Weimann and Chun-Lei Yang

Journal of Institutional and Theoretical Economics (JITE), 2004, vol. 160, issue 4, 576-606

Abstract: Experiments on sequential bargaining have shown that subjects' behavior is far from the equilibrium prediction. Whereas previous models explain these deviations by some kind of social preferences, we investigate an alternative interpretation of behavior based on the assumption of bounded rational self-interest. Our analyses reveal that, in line with this interpretation, bargaining outcomes depend on subjects' payoff consequences from punishment. However, after preplay communication, we find a much weaker effect of these payoff consequences and a tremendous increase in the number of equal splits. This communication effect can be attributed to reputation effects only to a minor degree, if at all.

JEL-codes: C78 C91 C92 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (22)

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