Time Preferences: Do They Matter in Bargaining?
U of London Queen Mary & Westfield College Econ. Working Paper No. 445
53 Pages Posted: 26 Nov 2001
Date Written: October 2001
Experimental studies of bargaining generally impose time preferences' on subjects, in the sense that in case of disagreement, the experimenter reduces the size of the surplus bargained over by imposing exogenously some monetary cost. Contrary to this practice, in this study time preferences are first elicited in a preliminary phase, and then bargaining begins. I show that although subjects are sensitive to the timing of a monetary reward, this plays no role in determining bargaining behaviour. Furthermore, when the bargaining game is played in conventional experimental setting with monetary costs of delay, these do have an impact on subjects' conduct in negotiations.
Keywords: Bargaining, Time preferences, Experiments
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