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Games, Volume 3, Issue 3 (September 2012), Pages 119-137

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Research

Open AccessArticle Incomplete Information about Social Preferences Explains Equal Division and Delay in Bargaining
Games 2012, 3(3), 119-137; doi:10.3390/g3030119
Received: 30 July 2012 / Revised: 23 August 2012 / Accepted: 27 August 2012 / Published: 13 September 2012
Cited by 1 | PDF Full-text (616 KB) | HTML Full-text | XML Full-text
Abstract
Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement occurs even if all experimentally
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Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement occurs even if all experimentally controlled information is common knowledge. This paper rationalizes both regularities coherently by modeling heterogeneous social preferences, either self-interest or envy, of one bargaining party as private information in a three period game of bargaining and preference screening and signaling. Full article

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