Cheap Talk , Round Numbers , and the Economics of Negotiation ∗

نویسندگان

  • Matt Backus
  • Thomas Blake
  • Steven Tadelis
چکیده

Can sellers credibly signal their private information to reduce frictions in negotiations? Guided by a simple cheap-talk model, we posit that impatient sellers use round numbers to signal their willingness to cut prices in order to sell faster, and test its implications using millions of online bargaining interactions. Items listed at multiples of $100 receive offers that are 5%–8% lower but that arrive 6–11 days sooner than listings at neighboring “precise” values, and are 3%–5% more likely to sell. Similar patterns in real estate transactions suggest that round-number signaling plays a broader role in negotiations. JEL classifications: C78, D82, D83, M21. ∗We thank Panle Jia Barwick, Willie Fuchs, Brett Green, and Greg Lewis for helpful discussions, and many seminar participants for helpful comments. We are grateful to Chad Syverson for sharing data on real estate transactions in the State of Illinois. †Cornell University and eBay Research Labs, [email protected] ‡eBay Research Labs, [email protected] §UC Berkeley, NBER and eBay Research Labs, [email protected]

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Working Paper Department of Economics Cheap Talk Car Matter If

This paper describes an intuitive way in which cheap talk can matter in a two-stage bargaining game in which talk may be followed by serious negotiation. The intuition that all buyers would claim to have low reservation prices is incorrect in our model. Instead, the paper emphasizes that if good-faith participation is endogenously determined then the parties can use talk to trade, off bargainin...

متن کامل

Cheap talk and reputation in repeated pre-trial negotiation

Infinitely repeated interaction between a defendant and a plaintiff can enhance the credibility of cheap talk and improve efficiency in outcome that would be infeasible without cheap talk. The basic driving force is reputation effect. If the players are concerned about their reputation, cheap talk cannot be taken as meaningless even in a game where the interests of the players are sufficiently ...

متن کامل

The role of negotiation and TA in Iranians’ second language acquisition

In this study, it is attempted to survey some intervening factors leading L2 Iranian learners’ not to be successful as well, and then seeks some of the features that might be applicable to open new windows into L2 learners in Iran. Also it concerns some aspects of language learning, which have received poor attention from both pedagogical and non-pedagogical areas. This article examined some so...

متن کامل

Cheap Talk, Information, and Coordination -Experimental Evidence

Costless and non-binding pre-play communication (cheap talk) has been found to often be effective in achieving efficient outcomes in experimental games. However, in previous two-player experimental games each player was informed about both his payoff and the action of the other player in the pair. In the field, people may engage in cheap talk and subsequently learn their payoffs, but frequently...

متن کامل

A Bayesian Examination of Anchoring Bias and Cheap Talk in Constructed Markets

We present a theoretical framework for understanding the relationship between anchoring bias, hypothetical bias, and cheap talk in constructed markets. In our theory, interviewers provide agents with signals such as cheap talk and bid values while eliciting the value for nonmarket goods. In response to these signals, agents revise their prior distributions over the value of the good. Previous e...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:

دوره   شماره 

صفحات  -

تاریخ انتشار 2015