The power of outside options in the presence of obstinate types *

• 成果类型: Article
• 署名作者: Heggedal, Tom-Reiel; Helland, Leif; Knutsen, Magnus Vage
• 署名单位: BI Norwegian Business School; BI Norwegian Business School
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.10.011
• 发表日期: 2022
• 页码: 454-468
• 关键词: Bargaining; reputation; Obstinate types; experiment

摘要

We experimentally investigate the role of two-sided reputation-building in dynamic bargaining. In the absence of outside options, rational bargainers have an incentive to imitate obstinate types that are committed to an aggressive demand, inducing delay. Outside options remove this incentive and ensure immediate agreement whenever two rational bargainers match. Our data support the hypothesis that outside options cut down on imitation and ensure timely agreements, but only if subjects share a belief about what constitutes obstinacy. Further, we find that outside options are exercised excessively and that efficiency is no better than it is in their absence. We ascribe this result to the presence of fairness preferences in the subject pool.(c) 2022 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).