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The bargaining power of commitment: An experiment of the effects of threats in the sequential hawk–dove game

Luis Alejandro Palacio García, Alexandra Cortés Aguilar and Manuel Muñoz-Herrera
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Luis Alejandro Palacio García: Universidad Industrial de Santander, Colombia
Manuel Muñoz-Herrera: University of Groningen, The Netherlands

Authors registered in the RePEc Author Service: Manu Muñoz-Herrera

Rationality and Society, 2015, vol. 27, issue 3, 283-308

Abstract: This article studies experimentally the conditions that improve bargaining power by means of threats. The analysis centers on three essential elements of the commitment: the possibility of announcing one’s actions, the credibility of these messages, and the experience acquired in the negotiation process. For this, we chose the sequential hawk–dove game due to the fact that it is a negotiation environment with a non-equitable distribution of payoffs in equilibrium. The empirical evidence of our experiment shows that, in the first period, subjects do not realize the bargaining power of the commitment. When the game is repeated and experience increases, senders understand that using threats can work in their favor and increase their payoffs. The credibility of the messages is also relevant for the strategic move. It is common to find subjects that are strategic liars, who lose bargaining power for this behavior.

Keywords: Credibility; pre-play communication; strategic lying (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1177/1043463115592848

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