Blindfolded vs. informed ultimatum bargaining: A theoretical and experimental analysis
Werner Güth (),
Manfred Stadler and
Alexandra Zaby ()
No 90, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics
This paper analyzes blindfolded versus informed ultimatum bargaining where proposer and responder are both either uninformed or informed about the size of the pie. Analyzing the transition from one information setting to the other suggests that more information induces lower (higher) price offers and acceptance thresholds when the pie is small (large). While our experimental data confirm this transition effect, risk aversion leads to diverging results in blindfolded ultimatum bargaining due to task-independent strategies such as 'equal sharing' or the 'golden mean.' The probability of successful bargaining is lower in case of blindfolded than informed ultimatum bargaining.
Keywords: ultimatum bargaining; information structure; experimental economics (search for similar items in EconPapers)
JEL-codes: C91 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-exp
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Journal Article: Blindfolded vs. Informed Ultimatum Bargaining – A Theoretical and Experimental Analysis (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:90
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