Focal points and payoff information in tacit bargaining

Isoni, Andrea, Poulsen, Anders, Sugden, Robert and Tsutsui, Kei (2019) Focal points and payoff information in tacit bargaining. Games and Economic Behavior, 114. pp. 193-214. ISSN 0899-8256

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Abstract

Schelling proposed that payoff-irrelevant cues can affect the outcome of tacit bargaining games by creating focal points. Tests of this hypothesis have found that conflicts of interest between players inhibit focal-point reasoning. We investigate experimentally whether this effect is reduced if players have imperfect information about each other’s payoffs. When players know only their own payoffs, they fail to ignore this information even though it cannot assist coordination; the effects of payoff-irrelevant cues on coordination success are small. When no exact information about payoffs is provided, payoff-irrelevant cues are more helpful, but not as much as when conflict is absent.

Item Type: Article
Uncontrolled Keywords: focal points,tacit bargaining,coordination,conflict of interest,payoff information,payoff-irrelevant cue,economics, econometrics and finance(all) ,/dk/atira/pure/subjectarea/asjc/2000
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: LivePure Connector
Date Deposited: 25 Jan 2019 10:30
Last Modified: 18 Mar 2020 02:32
URI: https://ueaeprints.uea.ac.uk/id/eprint/69677
DOI: 10.1016/j.geb.2019.01.008

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