Real-time tacit bargaining, payoff focality, and coordination complexity: Experimental evidence

We conduct a bargaining experiment where interaction is tacit and payoffs are earned and cumulated in real time. We test hypotheses about the interaction between the focal properties of payoffs and the complexity of coordinating on an intertemporal behavior that achieves them. The general finding is...

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Bibliographic Details
Published inGames and economic behavior Vol. 102; pp. 687 - 699
Main Authors Luhan, Wolfgang J., Poulsen, Anders U., Roos, Michael W.M.
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.03.2017
Subjects
Bargaining
Coordination complexity
Payoff focality
Coordination complexity
C70
C92
Bargaining
Payoff focality
C72
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Summary:We conduct a bargaining experiment where interaction is tacit and payoffs are earned and cumulated in real time. We test hypotheses about the interaction between the focal properties of payoffs and the complexity of coordinating on an intertemporal behavior that achieves them. The general finding is that when a payoff focal outcome requires a complicated coordination scheme bargainers tend to settle on a simpler and sometimes inefficient behavior. •We experimentally consider a tacit bargaining situation.•Players earn and cumulate their payoffs in real time.•We vary the focality of payoffs, and how complex it is to coordinate on them.•Both payoff focality and coordination complexity shape observed behavior.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2017.02.016