TY - JOUR
T1 - Bargaining through agents
T2 - An experimental study of delegation and commitment
AU - Schotter, Andrew
AU - Zheng, Wei
AU - Snyder, Blaine
N1 - Funding Information:
While face-to-face bargaining has proven itself to be extremely ef®cient 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 ®nd a substantial increase in inef®ciency when bargaining is conducted through agents rather than through principals and offer an explanation for this rise in inef®ciency. As such, this paper helps to shed light on the growing literature on delegation, commitment, and preference distortion games. Journal of Economic Literature Classi®cation Numbers: C78, C92. Q 2000 Academic Press *The authors thank the C.V. Starr Center for Applied Economics at New York University for its ®nancial assistance. Also, early work on this project was funded under National Science Foundation Grant No. SES-8721277 awarded to New York University. We have also bene®ted from numerous discussions with Roy Radner and Peter Linhart and from the very helpful comments of an anonymous referee. Finally, we would like to thank Antonio Merlo, Alan Corns, Gautam Barua, Alberto Casagrande, Jeff Davis, Karl Rothfuss, and Sara Bertin-Levecq for their assistance in helping us run the experiments.
PY - 2000/2
Y1 - 2000/2
N2 - 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.
AB - 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.
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U2 - 10.1006/game.1999.0728
DO - 10.1006/game.1999.0728
M3 - Article
AN - SCOPUS:0012057135
SN - 0899-8256
VL - 30
SP - 248
EP - 292
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 2
ER -