Ultimatum Concession Bargaining: An Experimental Study

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Title: Ultimatum Concession Bargaining: An Experimental Study
Authors: Felli, Chiara | Güth, Werner | Mata Pérez, Esther | Ponti, Giovanni
Research Group/s: Microeconomía Aplicada (GIMA)
Center, Department or Service: Universidad de Alicante. Departamento de Fundamentos del Análisis Económico
Keywords: Bargaining experiments | Concession making
Knowledge Area: Fundamentos del Análisis Económico
Issue Date: 2018
Publisher: SAGE Publications
Citation: Journal of Conflict Resolution. 2018, 62(5): 1012-1043. doi:10.1177/0022002716676312
Abstract: We collect experimental evidence on a modified version of the standard ultimatum game in which the responder states an acceptance threshold below which the offer is rejected and both players, proposer and responder, are allowed several attempts to reach an agreement by conceding. Proposers concede by increasing offers and responders concede by decreasing acceptance thresholds. Treatments differ in whether a further attempt requires that at least one party should have conceded. A further condition varies the number of possible negotiating attempts, namely, 3 versus 5. Behavior in the lab diverges significantly from the theoretical solution in which the proposer is expected to get nearly the whole pie in each treatment. Proposers (responders) initially offer less (ask more) and concede more across negotiation attempts in the treatment in which concessions are required. Moreover, compulsory concessions weaken the bargaining position of the proposer, who eventually gets significantly less. Finally, although concessions significantly improve the likelihood of an agreement compared to standard ultimatum game experiments, the longer negotiation horizon (five attempts instead of three) delays the agreement without enhancing it, even when no concessions are needed.
Sponsor: The main funding was provided by the Max Planck Institute of Jena. Giovanni Ponti acknowledges additional financial support from the Spanish Ministry of Economics and Competitiveness (ECO2015-65820-P), MIUR (PRIN 20103S5RN3_002), and Generalitat Valenciana (Research Projects Gruposo3/086 and PROMETEO/2013/037).
URI: http://hdl.handle.net/10045/74791
ISSN: 0022-0027 (Print) | 1552-8766 (Online)
DOI: 10.1177/0022002716676312
Language: eng
Type: info:eu-repo/semantics/article
Rights: © The Author(s) 2016
Peer Review: si
Publisher version: https://doi.org/10.1177/0022002716676312
Appears in Collections:INV - GIMA - Artículos de Revistas

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