Pawn Stars: Putting Theories of Negotiation to the Test

Abstract:     
Management science and economic theories of negotiations are tested using a unique data set. The History Channel television show Pawn Stars portrays many negotiations between customers and workers of a pawn shop. This provides a unique data set not typically available to researchers as the tactics of bargaining can be observed, recorded, and analyzed. Many, but not all, of the primary theories developed receive empirical support. The use of experts, experience, the gap between the initial offers, and the use of final offers all affect the likelihood of a deal being made as well as the division of the surplus. The party making the opening offer suffers a disadvantage, which stands in contrast to predictions of sequential bargaining and anchoring effects.

Number of Pages in PDF File: 29

Keywords: asymmetric information, bargaining, experts, final offer, negotiation, Pawn Stars

JEL Classification: C78, D82

working papers series