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Bargaining under Time Pressure

Author

Listed:
  • Karagözoğlu, Emin
  • Kocher, Martin G.
Abstract
We experimentally investigate the effect of time pressure in a rich-context, unstructured bargaining game with earned status and competing reference points. Our results show that average opening proposals, concessions, and agreed shares are very similar across different levels of time pressure. Nevertheless, as predicted, time pressure systematically influenced agreements. In particular, the likelihood of bargainers reaching the explicit reference point outcome in agreements increases with time pressure, and the likelihood of reaching the implicit reference point (equal division) in agreements decreases with time pressure. Disagreement rates and the frequency of last-moment agreements are strongly affected: the disagreement rate rises dramatically with time pressure, and last-moment agreements are significantly more frequent. This effect is explained by a stronger connection between the tension in first proposals and the final bargaining outcome under time pressure than without time pressure.

Suggested Citation

  • Karagözoğlu, Emin & Kocher, Martin G., 2015. "Bargaining under Time Pressure," Discussion Papers in Economics 26642, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenec:26642
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    Cited by:

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    2. Federica Alberti & Sven Fischer & Werner Güth & Kei Tsutsui, 2018. "Concession Bargaining," Journal of Conflict Resolution, Peace Science Society (International), vol. 62(9), pages 2017-2039, October.
    3. Bolton, Gary E. & Karagözoğlu, Emin, 2016. "On the influence of hard leverage in a soft leverage bargaining game: The importance of credible claims," Games and Economic Behavior, Elsevier, vol. 99(C), pages 164-179.
    4. Anbarci, Nejat & Feltovich, Nick, 2018. "How fully do people exploit their bargaining position? The effects of bargaining institution and the 50–50 norm," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 320-334.

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    More about this item

    Keywords

    Bargaining; Disagreements; Last-moment Agreements; Reference Points; Time Pressure.;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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