THE HIDDEN COST OF BARGAINING: EVIDENCE FROM A CHEATING-PRONE MARKETPLACE

• 成果类型: Article
• 署名作者: Bhattacharya, Haimanti; Dugar, Subhasish
• 署名单位: Utah System of Higher Education; University of Utah
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12456
• 发表日期: 2020
• 页码: 1253-1280
• 关键词: one-sided uncertainty; field experiment; ultimatum games; incomplete contracts; credence goods; fairness; COMPETITION; RENEGOTIATION; preferences; INFORMATION

摘要

It is widely believed that successful bargaining helps consumers increase their surplus. We present evidence from a field experiment showing that bargaining over price reduces buyer surplus in a marketplace where sellers cheat on the weight whose value may more than offset the price discount. Our results show that bargaining entails hidden costs since sellers cheat significantly more when buyers bargain than not and they cheat significantly more when bargaining succeeds than fails. Overall bargaining reduces buyer surplus than not bargaining. Our result is relevant for credence goods markets where bargaining over prices may induce sellers to undertreat more.