Power asymmetry and escalation in bargaining

Arbeitspapier

Bargaining is prevalent in economic interactions. Under complete information, game theory predicts efficient bargaining outcomes (immediate acceptance of first offer) (see Rubinstein, 1982). However, continuous rejections of offers leading to inefficient delays (escalation) have regularly been found in previous bargaining experiments even under complete information (see Roth, 1995). I test experimentally (1) whether power asymmetry leads to more escalation in bargaining and (2) whether perspective-taking reduces escalation. I find that power asymmetry increases escalation, but that perspective-taking does not reduce escalation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Jena Economic Research Papers ; No. 2011,054

Classification and Topics

• Classification: Wirtschaft ; Bargaining Theory; Matching Theory ; Information and Uncertainty: Other
• Subject: two-person bargaining experiment ; asymmetric power ; escalation ; perspective-taking ; Verhandlungstheorie ; Macht ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vollstädt, Ulrike
• Event: Veröffentlichung
• (who): Friedrich Schiller University Jena and Max Planck Institute of Economics
• (where): Jena
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/56883
• Last update: 10.03.2025, 11:42 AM CET