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Communication in multilateral bargaining

Agranov, Marina and Tergiman, Chloe (2014) Communication in multilateral bargaining. Journal of Public Economics, 118 . pp. 75-85. ISSN 0047-2727. doi:10.1016/j.jpubeco.2014.06.006.

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One of the most robust phenomena in the experimental literature on multilateral bargaining is the failure of proposers to extract equilibrium rents. However, all previous experiments have overlooked the fact that outside the lab committee members are allowed to – and do – engage in sometimes intense communication processes prior to voting on a proposal. We conduct an experimental test of the Baron–Ferejohn model in which we allow committee members to engage in unrestricted cheap-talk communication before a proposal is submitted. We find that proposers extract a significantly higher share of resources when communication is allowed. Communication increases proposer power through two channels. First, it mitigates the uncertainty surrounding the amount a coalition member is willing to accept. Second, it allows potential coalition members to compete for a place in the coalition by lowering this stated price.

Item Type:Article
Related URLs:
URLURL TypeDescription ItemSSWP 1378
Additional Information:© 2014 Elsevier B.V. Received 19 September 2013; Received in revised form 30 May 2014; Accepted 7 June 2014; Available online 26 June 2014. The authors would like to acknowledge that this research was generously supported by the Social Sciences and Humanities Research Council as well as the Gordon and Betty Moore Foundation Grant GBMF#1158 (“Experimentation with Large, Diverse and Interconnected Socio-Economic Systems”). We would also like to thank Ernesto Dal Bo, Pedro Dal Bo, Timothy Feddersen, Guillaume Frechette, Alessandro Lizerri, John Ledyard, Rebecca Morton, Muriel Niederle, Salvatore Nunnari, Erkut Ozbay, Thomas Palfrey, Al Roth, Emanuel Vespa, Alistair Wilson, Leeat Yariv, the seminar participants at the Pennsylvania State University, Caltech, UBC, Stanford and UCSD, the conference participants at ESA (Tucson and New York), SITE, and Public Choice for helpful comments and discussions. Formerly SSWP 1378.
Funding AgencyGrant Number
Social Sciences and Humanities Research Council (SSHRC)UNSPECIFIED
Gordon and Betty Moore FoundationGBMF 1158
Subject Keywords:Legislative bargaining; Communication; Laboratory experiment
Record Number:CaltechAUTHORS:20141030-090720806
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Official Citation:Marina Agranov, Chloe Tergiman, Communication in multilateral bargaining, Journal of Public Economics, Volume 118, October 2014, Pages 75-85, ISSN 0047-2727, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:51048
Deposited By: Tony Diaz
Deposited On:30 Oct 2014 16:24
Last Modified:10 Nov 2021 19:05

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