Influence of Competition on Negotiation Outcomes

In an experiment, one participant (the Proposer) is given $100 and must offer a portion of it to a second participant (the Responder). The Responder can either accept the offer, in which case they both get the money as proposed, or reject it, in which case neither participant receives any money. The data from many rounds of this one-shot interaction show two key patterns: (1) The most frequent offer made by Proposers is $50, and (2) Responders typically reject any offer below $30. What is the most likely explanation for these observed behaviors?

Predicting Behavior in a Modified Bargaining Game

In a one-shot bargaining experiment, a 'Proposer' suggests how to split a sum of money with a 'Responder'. The Responder can accept or reject the offer; if rejected, neither person receives anything. Match each observed action to the underlying motivation it most strongly demonstrates.

Interpreting Experimental Bargaining Results

Interpreting Experimental Bargaining Results

Evaluating Economic Models with Experimental Evidence

In a one-shot bargaining experiment where one person proposes a split of $100 and another accepts or rejects it (with rejection meaning neither gets anything), a Proposer offering only $1 demonstrates a purely rational, self-interested strategy that maximizes their expected monetary payoff.

Analyzing the Impact of Anonymity on Bargaining Behavior

Cross-Cultural Bargaining Behavior

Designing an Experimental Variation to Test Motivations

Influence of Competition on Negotiation Outcomes