Bargaining through agents: An experimental study of delegation and commitment

Andrew Schotter, Wei Zheng, Blaine Snyder

    Research output: Contribution to journalArticle

    Abstract

    While face-to-face bargaining has proven itself to be extremely efficient in the laboratory, it appears to break down often in the real world. This discrepancy, we assert, is explained by the fact that in the real world face-to-face bargaining is usually conducted not between principals but between the agents of principals. We find a substantial increase in inefficiency when bargaining is conducted through agents rather than through principals and offer an explanation for this rise in inefficiency. As such, this paper helps to shed light on the growing literature on delegation, commitment, and preference distortion games. Journal of Economic Literature Classification Numbers: C78, C92.

    Original languageEnglish (US)
    Pages (from-to)248-292
    Number of pages45
    JournalGames and Economic Behavior
    Volume30
    Issue number2
    DOIs
    StatePublished - Feb 2000

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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