Driving a Hard Bargain is a Balancing Act: How social preferences constrain the negotiation process

Yola Engler and Lionel Page

No 5kw3f, SocArXiv from Center for Open Science

Abstract: We investigate the haggling process in bargaining. Using an experimental bargaining game, we find that a first offer has a significant impact on the bargaining outcome even if it is costless to reject. First offers convey information on the player’s reservation value induced by his social preferences. They are most often accepted when they are not above the equal split. However, offers which request much more than the equal split induce punishing counteroffers. The bargaining outcome is therefore critically influenced by the balance of toughness and kindness signaled through the offers made in the haggling phase.

Date: 2021-06-08
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (1)

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Journal Article: Driving a hard bargain is a balancing act: how social preferences constrain the negotiation process (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:5kw3f

DOI: 10.31219/osf.io/5kw3f

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