{"title":"Pre-commitment in bargaining with endogenous credibility","authors":"","doi":"10.1016/j.jebo.2024.106714","DOIUrl":null,"url":null,"abstract":"<div><p>We study whether negotiators adopt commitment tactics in bargaining, a concept first proposed by Schelling (1956), and their choice of the credibility of commitment. In a modified ultimatum game experiment, the responder is allowed to pre-commit to a minimum acceptable offer (MAO) before an offer is proposed. Meanwhile, they choose the credibility of the commitment, measured by a cost of backing down (CBD) incurred if the responder accepts an offer lower than the MAO. We find that nearly 40% of responders chose a CBD substantially lower than their MAO, despite the fact that proposers were more likely to cave in and offer a larger share of the bargaining surplus when fully credible commitments were made. Informing responders of the proposers' minimum acceptable share of the bargaining surplus does not reduce partially credible commitments, suggesting that these commitments were unlikely made to enlarge the contract zone. Further treatments and analyses suggest that other-regarding preferences may be the reason behind partially credible commitments.</p></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":null,"pages":null},"PeriodicalIF":2.3000,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Behavior & Organization","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0167268124003287","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We study whether negotiators adopt commitment tactics in bargaining, a concept first proposed by Schelling (1956), and their choice of the credibility of commitment. In a modified ultimatum game experiment, the responder is allowed to pre-commit to a minimum acceptable offer (MAO) before an offer is proposed. Meanwhile, they choose the credibility of the commitment, measured by a cost of backing down (CBD) incurred if the responder accepts an offer lower than the MAO. We find that nearly 40% of responders chose a CBD substantially lower than their MAO, despite the fact that proposers were more likely to cave in and offer a larger share of the bargaining surplus when fully credible commitments were made. Informing responders of the proposers' minimum acceptable share of the bargaining surplus does not reduce partially credible commitments, suggesting that these commitments were unlikely made to enlarge the contract zone. Further treatments and analyses suggest that other-regarding preferences may be the reason behind partially credible commitments.
期刊介绍：
The Journal of Economic Behavior and Organization is devoted to theoretical and empirical research concerning economic decision, organization and behavior and to economic change in all its aspects. Its specific purposes are to foster an improved understanding of how human cognitive, computational and informational characteristics influence the working of economic organizations and market economies and how an economy structural features lead to various types of micro and macro behavior, to changing patterns of development and to institutional evolution. Research with these purposes that explore the interrelations of economics with other disciplines such as biology, psychology, law, anthropology, sociology and mathematics is particularly welcome.
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