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How Communication Links Influence Coalition Bargaining: A Laboratory Investigation

In: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining

Author

Listed:
  • Gary E. Bolton

    (Smeal College of Business, Penn State University. University Park, Pennsylvania 16802, USA and Graduate School of Business Administration, Harvard University, Cambridge, Massachusetts 02139, USA)

  • Kalyan Chatterjee

    (Department of Economics, Penn State University, University Park, Pennsylvania 16802, USA)

  • Kathleen L. McGinn

    (Graduate School of Business Administration, Harvard University, Cambridge, Massachusetts 02139, USA)

Abstract

Complexity of communication is one of the important factors that distinguishes multilateral negotiation from its bilateral cousin. We investigate how the communication configuration affects a three-person coalition negotiation. Restricting who can communicate with whom strongly influences outcomes, and not always in ways that current theory anticipates. Competitive frictions, including a tendency to communicate offers privately, appear to shape much of what we observe. Our results suggest that parties with weaker alternatives would benefit from a more constrained structure, especially if they can be the conduit of communication, while those endowed with stronger alternatives would do well to work within a more public communication structure that promotes competitive bidding.

Suggested Citation

  • Gary E. Bolton & Kalyan Chatterjee & Kathleen L. McGinn, 2013. "How Communication Links Influence Coalition Bargaining: A Laboratory Investigation," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 6, pages 113-128, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814447577_0006
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