Strategic ignorance in ultimatum bargaining

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2013
Volume: 92
Issue: C
Pages: 104-115

Authors (2)

Conrads, Julian (Universität zu Köln) Irlenbusch, Bernd (not in RePEc)

Score contribution per author:

1.009 = (α=2.02 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In his classic article “An Essay on Bargaining” Schelling (1956) argues that ignorance might actually be strength rather than weakness. We test and confirm Schelling's conjecture in a simple take-it-or-leave-it bargaining experiment where the proposer can choose between two possible offers. Option A always gives the proposer a higher payoff than option B. The payoff of the responder depends on the (randomly determined) state of nature. In one state payoffs of the two players are aligned whereas they are not aligned in the other state. The responder is always informed about the actual state. The proposer knows the actual state in our first treatment but not in the second. We find that proposers indeed benefit from ignorance because the responders accept almost all offers (even the unfavorable ones) if the payoffs are not transparent for the proposer. In additional treatments we investigate bargaining situations where the proposer can deliberately remain ignorant.

Technical Details

RePEc Handle
repec:eee:jeborg:v:92:y:2013:i:c:p:104-115
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25