Article | Journal of Economic Psychology | February 2012

Walking the Talk in Multiparty Bargaining: An Experimental Investigation

by Kathleen L. McGinn, Katherine L. Milkman and Markus Noth

Abstract

We study the framing effects of communication on payoffs in multiparty bargaining. Communication has been shown to be more truthful and revealing than predicted in equilibrium. Because talk is preference revealing, it may effectively frame bargaining around a logic of fairness or competition, moving parties on a path toward or away from equal-division agreements. These endogenous framing effects may outweigh any overall social utility effects due to the mere presence of communication. In two studies, we find that non-binding talk about fairness within a three-party, complete-information game leads toward off equilibrium, equal division payoffs, while non-binding talk focusing on competitive reasoning moves parties away from equal divisions. Our two studies allow us to demonstrate that manipulated pre-game talk and spontaneous within-game dialogue lead to the same results.

Keywords: Competition; Negotiation Process; Fairness; Negotiation Types; Interpersonal Communication; Game Theory; Cooperation;

Citation:

McGinn, Kathleen L., Katherine L. Milkman, and Markus Noth. "Walking the Talk in Multiparty Bargaining: An Experimental Investigation." Journal of Economic Psychology 33, no. 1 (February 2012).