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The role of information in different bargaining protocols

Published online by Cambridge University Press:  14 March 2025

Rafael Hortala-Vallve ,
Aniol Llorente-Saguer  and
Rosemarie Nagel
Rafael Hortala-Vallve
Affiliation:
Government Department, London School of Economics, London, UK
Aniol Llorente-Saguer*
Affiliation:
Max Planck Institute for Research on Collective Goods, Bonn, Germany
Rosemarie Nagel
Affiliation:
Universitat Pompeu Fabra, ICREA, Barcelona, Spain
*
[email protected]
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Abstract

We analyze a bargaining protocol recently proposed in the literature vis-à-vis unconstrained negotiation. This new mechanism extracts “gains from trade” inherent in the differing valuation of two parties towards various issues where conflict exists. We assess the role of incomplete vs. complete information in the efficiency achieved by this new mechanism and by unconstrained negotiation. We find that unconstrained negotiation does best under a situation of complete information where the valuations of both bargaining parties are common knowledge. Instead, the newly proposed mechanism does best in a situation with incomplete information. The sources of inefficiencies in each of the two cases arise from the different strategic use of the available information.

Keywords

VotingNegotiationMultidimensionalInformationConflict resolutionExperiments

JEL classification

D74: Conflict • Conflict Resolution • Alliances • Revolutions C7: Game Theory and Bargaining Theory D8: Information, Knowledge, and Uncertainty C9: Design of Experiments
Type
Article
Information
Experimental Economics , Volume 16 , Issue 1: Mechanisms and Methodology , March 2013 , pp. 88 - 113
Copyright
Copyright © 2012 Economic Science Association

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Footnotes

Electronic Supplementary Material The online version of this article (doi:https://doi.org/10.1007/s10683-012-9328-6) contains supplementary material, which is available to authorized users.

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