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Experimental analysis of impatience in bilateral and multilateral negotiations

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  • Burns, Nathaniel A.
  • Deck, Cary A.
  • Thomas, Charles J.

Abstract

We conduct unstructured bilateral and multilateral negotiations in a laboratory experiment, to assess whether bargainers’ impatience affects outcomes as predicted by structured models meant to represent less-structured naturally-occurring settings. For concreteness we consider a buyer who can make only one trade negotiating with one or two sellers, with impatience induced via time pressure: a bargainer receives their negotiated payoff only if agreement is reached before expiration of a randomly determined bargainer-specific time limit that is unknown to all bargainers. We find increasing the buyer’s impatience generally harms the buyer, supporting the predictions from standard bilateral models and from some multilateral models.

Suggested Citation

  • Burns, Nathaniel A. & Deck, Cary A. & Thomas, Charles J., 2023. "Experimental analysis of impatience in bilateral and multilateral negotiations," Journal of Economic Psychology, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:joepsy:v:95:y:2023:i:c:s0167487023000077
    DOI: 10.1016/j.joep.2023.102606
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    References listed on IDEAS

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    More about this item

    Keywords

    Bilateral negotiations; Multilateral negotiations; Impatience; Bargaining power; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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