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Communication in multilateral bargaining with joint production

Author

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  • Andrzej Baranski

    (Division of Social Science, New York University Abu Dhabi)

  • Caleb A. Cox

    (Virginia Commonwealth University)

Abstract

We experimentally investigate the effect of pre-bargaining communication on productive incentives in a multilateral bargaining game with joint production under two conditions: observable and unobservable investments. In both conditions, communication fosters fair sharing and is rarely used to pit individuals against each other. Proportional sharing arises with observable investments with or without communication, leading to high efficiency gains. Without investment observability, communication is widely used to truthfully report investments and call for equitable sharing, allowing substantial efficiency gains. Since communication occurs after production, our results highlight a novel indirect channel through which communication can enhance efficiency in social dilemmas. Our results contrast with previous findings on bargaining over an exogenous fund, where communication leads to highly unequal outcomes, competitive messages, and virtually no appeals to fairness.

Suggested Citation

  • Andrzej Baranski & Caleb A. Cox, 2023. "Communication in multilateral bargaining with joint production," Experimental Economics, Springer;Economic Science Association, vol. 26(1), pages 55-77, March.
    • Handle: RePEc:kap:expeco:v:26:y:2023:i:1:d:10.1007_s10683-022-09760-z
    DOI: 10.1007/s10683-022-09760-z
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    Cited by:

    1. Andrzej Baranski & Ernesto Reuben, 2023. "Competing for Proposal Rights: Theory and Experimental Evidence," Working Papers 20220085, New York University Abu Dhabi, Department of Social Science, revised Mar 2023.
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    3. Baranski, Andrzej & Haas, Nicholas, 2023. "The timing of communication and retaliation in bargaining: An experimental study," Journal of Economic Psychology, Elsevier, vol. 96(C).

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    More about this item

    Keywords

    Multilateral bargaining; Communication; Profit sharing;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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