Walking the Talk in Multiparty Bargaining: An Experimental Investigation

Kathleen L. McGinn; Katherine L. Milkman; Markus  Noth

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;

Format: Print

13 pages

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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).

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Article | Quarterly Journal of Economics | May 2020

Negotiating a Better Future: How Interpersonal Skills Facilitate Inter-Generational Investment

Nava Ashraf, Natalie Bau, Corinne Low and Kathleen McGinn

Using a randomized control trial, we examine whether offering adolescent girls nonmaterial resources—specifically, negotiation skills—can improve educational outcomes in a low-income country. In so doing, we provide the first evidence on the effects of an intervention that increased noncognitive, interpersonal skills during adolescence. Long-run administrative data shows that negotiation training significantly improved educational outcomes over the next three years. The training had greater effects than two alternative treatments (offering girls a safe physical space with female mentors and offering girls information about the returns to education), suggesting that negotiation skills themselves drive the effect. Further evidence from a lab-in-the-field experiment, which simulates parents’ educational investment decisions, and a midline survey suggests that negotiation skills improved girls’ outcomes by moving households’ human capital investments closer to the efficient frontier. This is consistent with an incomplete contracting model, where negotiation allows daughters to strategically cooperate with parents.

Keywords: Negotiation; Competency and Skills; Training; Age; Gender; Education; Investment; Outcome or Result; Developing Countries and Economies;

Citation:

Ashraf, Nava, Natalie Bau, Corinne Low, and Kathleen McGinn. "Negotiating a Better Future: How Interpersonal Skills Facilitate Inter-Generational Investment." Quarterly Journal of Economics 135, no. 2 (May 2020): 1095–1151. View Details

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Walking the Talk in Multiparty Bargaining: An Experimental Investigation

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