Cheap talk in bargaining experiments: lying and threats in ultimatum games
نویسندگان
چکیده
In most models of bargaining, costless and unverifiable lies about private information and incredible threats about future actions are considered cheap talk and do not impact outcomes. In practice, however, this type of talk is often an integral part of bargaining. This experiment examines the impact of cheap talk in an ultimatum bargaining setting with two-sided imperfect information. In contrast to previous work, the experiment provides an opportunity for deceptions to be revealed and punished. Results show that lies about private information and (incredible) threats of future actions do influence bargaining outcomes (offers and responses) in both the shortand long-term. © 2002 Elsevier Science B.V. All rights reserved. JEL classification: C9: laboratory experiments; C72: non-cooperative games
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