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Responder Strategy under Competition
In a standard one-on-one negotiation, a 'Responder' might reject a very low offer (e.g., $1 out of $100) on principle, even though it means getting nothing. Now, consider a variation where a 'Proposer' makes a single, simultaneous offer to two competing 'Responders'. If at least one Responder accepts, the deal is made. Why is a Responder in this competitive scenario significantly more likely to accept the same $1 offer they would have rejected in the one-on-one version?
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Introduction to Microeconomics Course
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Responder's Decision-Making in the Ultimatum Game with Competition
A 'Proposer' is given $100 and must offer a split to two 'Responders'. The same offer is made to both Responders simultaneously. If at least one Responder accepts the offer, the money is split as proposed with one of the accepting Responders (if both accept, one is chosen at random), and the other Responder gets nothing. If neither Responder accepts, no one gets any money. Compared to a situation with only one Responder, how does the presence of a second, competing Responder most likely change the Proposer's strategy?
Responder's Dilemma in a Competitive Negotiation
Evaluating a Low-Offer Strategy in a Competitive Negotiation Scenario
Responder Strategy under Competition
In a negotiation where a Proposer offers a split of a sum of money to two Responders simultaneously (where if either Responder accepts, the deal is made), an individual Responder's bargaining power to secure a larger share of the money is greater than it would be if they were the only Responder.
A Proposer is to split $100. Match each negotiation setup described below with the most likely strategic position and outcome for the Proposer.
Predicting the Rational Outcome in a Competitive Ultimatum Game
Analyzing a Shift in Negotiation Strategy
In a negotiation where a Proposer makes a single take-it-or-leave-it offer to two competing Responders simultaneously, the introduction of competition between the Responders tends to drive the Proposer's offer significantly ________.
A 'Proposer' is deciding how to split $100 with two competing 'Responders'. The same take-it-or-leave-it offer will be made to both Responders simultaneously; if at least one accepts, the deal is made. Arrange the following steps in the logical order a profit-maximizing Proposer would follow to determine their offer.