Department of Mathematics
Title : Bargaining, Asymmetric Information, and Communication - An Experiment
| Speaker: Dr Ben Greiner Affiliation: University of New South Wales Time: 12:00 pm Tuesday, 9 April, 2013 Location: Lab 04, Level 0, Owen Glenn Building |
Abstract
| This paper explores the effect of communication on negotiation behavior in a stylized bargaining environment with asymmetric information. In particular, we study an Ultimatum Game in which the total amount to be bargained over (the pie) might be unknown to one party. We systematically vary whether both parties are informed about the pie size (baseline), or only the proposer, or only the responder. In addition, we vary whether there is no communication before the bargaining procedure, or whether the informed party can send a message about the pie size before decisions are made. In one communication condition, the message sender is free to choose the correct or the wrong message (cheap talk), while in the second communication condition the sender can only choose whether to reveal or not to reveal the true pie size ("true talk"). We find that contrary to the theoretical prediction cheap talk has a significant positive effect on efficiency, while true talk is less effective than expected. |
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Programmes and Centres
- New Zealand Institute of Mathematics and its Applications (NZIMA)
- Community for Understanding and Learning in the Mathematical Sciences (CULMS)
- Centre for Mathematical Social Science (CMSS)
- Department of Computer Science
- Department of Engineering Science
- Department of Physics
- Department of Statistics
- Auckland Bioengineering Institute
