Cooling-Off in Negotiations - Does It Work?

Patrick Schmitz, Andreas Roider and Jörg Oechssler

No 6807, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Negotiations frequently end in conflict after one party rejects a final offer. In a large-scale internet experiment we investigate whether a 24-hour cooling-off period leads to fewer rejections in ultimatum bargaining. We conduct a standard cash treatment and a lottery treatment, where subjects received lottery tickets for several large prizes - emulating a high-stakes environment. In the lottery treatment, unfair offers are less frequently rejected, and cooling-off significantly reduces the rejection rate further. In the cash treatment, rejections are more frequent and remain so after cooling-off. This treatment difference is particularly pronounced for subjects with lower cognitive abilities.

Keywords: Behavioural biases; Cognitive abilities; Cooling-off; Emotions; Internet experiment; Negotiations; Ultimatum game (search for similar items in EconPapers)
JEL-codes: C78 C99 D8 (search for similar items in EconPapers)
Date: 2008-04
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Cooling Off in Negotiations: Does it Work? (2015)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2009)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2008)
Working Paper: Cooling-Off in Negotiations - Does It Work? (2008)
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