Varying information conditions in bargaining: an experiment

Abstract

We vary the information regarding the source of bargaining power. In our experiment, there are two potential sources of bargaining power gained through an advantageous disagreement point payoff: (i) effort and (ii) luck. For each one of these, we vary the source information as follows: (i) both agents know and (ii) neither knows. This gives us a 2×2 experimental design varied across subjects. In line with the previous work, we have found that advantageous players in both knows-performance treatment earns significantly more whereas there is no difference between luck based treatments and none knows treatments in agreement conditions. Additionally, there is no difference in disagreement rates among any treatment.