(In)Transparency of Information Acquisition: A Bargaining Experiment

22 Pages Posted: 13 Oct 2006

See all articles by Thomas Gehrig

Thomas Gehrig

University of Vienna

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Date Written: September 2006

Abstract

We analyze how transparency affects information acquisition in a bargaining context, where proposers may chose to purchase information about the unknown outside option of their bargaining partner. Although information acquisition is excessive in all our scenarios we find that the bargaining outcome depends crucially on the transparency of the bargaining environment. In transparent games, when responders can observe whether proposers have acquired information, acceptance rates are higher. Accordingly, in transparent bargaining environments information is more valuable, both individually and socially.

Keywords: Information acquisition, ultimatum experiment, transparency

JEL Classification: C91, D82

Suggested Citation

Gehrig, Thomas and Güth, Werner, (In)Transparency of Information Acquisition: A Bargaining Experiment (September 2006). CEPR Discussion Paper No. 5817, Available at SSRN: https://ssrn.com/abstract=937397

Thomas Gehrig (Contact Author)

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

Werner Güth

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

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