Incomplete Information about Social Preferences Explains Equal Division and Delay in Bargaining
Title: Incomplete Information about Social Preferences Explains Equal Division and Delay in Bargaining
Author: KOHLER, Stefan
Citation: Games, 2012, Vol. 3, No. 3, pp. 119-137
External link: http://www.mdpi.com/2073-4336/3/3/119
Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement occurs even if all experimentally controlled information is common knowledge. This paper rationalizes both regularities coherently by modeling heterogeneous social preferences, either self-interest or envy, of one bargaining party as private information in a three period game of bargaining and preference screening and signaling.
Received: 30 July 2012; in revised form: 23 August 2012 / Accepted: 27 August 2012 / Published: 13 September 2012.
Type of Access: openAccess
Earlier different version: http://hdl.handle.net/1814/7015
Version: Contains revised content based on author's EUI PhD thesis, 2007