The Role of Information in Bargaining: An Experimental Study
Abstract
A fundamental assumption in much of game theory and economics is that all the relevant information for determining the rational play of a game is contained in its structural description. Recent experimental studies of bargaining have demonstrated effects due to information not included in the classical models of games of complete information. The goal of the experiment reported here is to separate these effects into components that can be attributed to the possession of specific information by specific bargainers, and to assess the extent to which the observed behavior can be characterized as equilibrium behavior. The results of the experiment permit us to identify such component effects, in equilibrium, including effects that depend on whether certain information is common knowledge or not. The paper closes with some speculation on the causes of these effects.
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A likely interpretation of Roth and Murnighan (1982) is that both sides viewed as fair the focal settlement that benefitted themselves, so the $20-prize player was likely to hold out for half of the chips, while the $5-prize player demanded equal expected values.
“A likely interpretation is that both sides viewed as fair the focal settlement that benefitted themselves, so the $20prize player was likely to hold out for half of the chips, while the $5-prize player demanded equal expected values.”
From Explaining Bargaining Impasse: The Role of Self-Serving Biases (1997) · cites this paper as Roth and Murnighan, 1982
In Roth and Murnighan (1982), when neither player knew who would receive which payoff, subjects generally agreed to divide the chips about equally and only 12 percent of pairs failed to reach an agreement; when both subjects knew who was assigned to which payoff, 22 percent failed to reach agreement.
“When neither player knew who would receive which payoff, subjects generally agreed to divide the chips about equally and only 12 percent of pairs failed to reach an agreement and ended up with no payoff.However, when both subjects knew who was assigned to which payoff, 22 percent failed to reach agreement.”
From Explaining Bargaining Impasse: The Role of Self-Serving Biases (1997) · cites this paper as Roth and Murnighan, 1982
Cited by
Sorted by citations
Collective action and the evolution of social norms.
Ostrom, E. (2000) · Journal of Economic Perspectives · doi:10.1257/jep.14.3.137 · Cited by 4,195 · see citing works
Explaining Bargaining Impasse: The Role of Self-Serving Biases
Babcock, L., & Loewenstein, G. (1997) · Journal of Economic Perspectives · doi:10.1257/jep.11.1.109 · Cited by 1,071 · see citing works
- Authors
- Roth, A. E., & Murnighan, J. K.
- ORCID
- Roth, Alvin E.
- Venue
- Econometrica
- Publisher
- JSTOR
- Published
- 1982-09
- Volume
- 50
- Issue
- 5
- Pages
- 1123
- ISSN
- 0012-9682 (ISSN-L)
- OpenAlex
- W2113722870
- Cited by
- 311
- References
- 0
- Citations by year
- 2026: 5 · 2025: 5 · 2024: 5 · 2023: 5 · 2022: 4 · 2021: 6 · 2020: 11 · 2019: 7 · 2018: 10 · 2017: 9 · 2016: 18 · 2015: 11 · 2014: 15 · 2013: 10 · 2012: 15
- FWCI
- 22.83
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Econometrica (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Social Sciences › Decision Sciences › Management Science and Operations Research › Game Theory and Applications
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Game Theory and Voting Systems
- Keywords
- bargaining, information effects, common knowledge, equilibrium behavior, incomplete information, experimental economics
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