Bargaining Efficiency and Screening: An Experimental Investigation

Economics Working Paper 284

35 Pages Posted: 28 Jun 1998

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Abstract

This paper investigates whether information about generosity or fairness can be useful in lowering dispute costs and enhancing bargaining efficiency. Subjects were first screened using a dictator game, with the allocations chosen used to separate participants into two types. Mutually anonymous pairs of subjects then bargained, with a dispute cost structure imposed. Sorting with identification reduces dispute costs; there are also significant differences in bargaining efficiency across pairing types. Information about types is crucial for these differences and also strongly affects the relative bargaining success of the two types and the hypothetical optimal bargaining strategy.

JEL Classification: J52, C91, C78

Suggested Citation

Charness, Gary, Bargaining Efficiency and Screening: An Experimental Investigation. Economics Working Paper 284, Available at SSRN: https://ssrn.com/abstract=96641 or http://dx.doi.org/10.2139/ssrn.96641

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University of California, Santa Barbara (UCSB) - Department of Economics ( email )

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