Decision Times Reveal Private Information in Strategic Settings: Evidence from Bargaining Experiments

88 Pages Posted: 25 Aug 2017 Last revised: 22 Sep 2020

See all articles by Arkady Konovalov

Arkady Konovalov

University of Zurich - Department of Economics

Ian Krajbich

Ohio State University (OSU) - Department of Psychology; Ohio State University (OSU) - Department of Economics

Date Written: September 22, 2020

Abstract

People naturally respond quickly when they have a clear preference and slowly when they are close to indifference. The question is whether others exploit this tendency to infer private information. In two-stage bargaining experiments, we observe that the speed with
which buyers reject sellers’ first-stage offers decreases with the size of the immediate foregone surplus. This should allow sellers to infer buyers’ values from observable response times
(RT), creating an incentive for buyers to manipulate their RT. We identify distinct conditions under which subjects do, and do not, exhibit such strategic behavior. These results provide the first insight into the possible use of RT as a strategic variable.

Keywords: Response Time, Bargaining, Behavioral, Game Theory

JEL Classification: C91, D01, D87

Suggested Citation

Konovalov, Arkady and Krajbich, Ian, Decision Times Reveal Private Information in Strategic Settings: Evidence from Bargaining Experiments (September 22, 2020). Available at SSRN: https://ssrn.com/abstract=3023640 or http://dx.doi.org/10.2139/ssrn.3023640

Arkady Konovalov

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Ian Krajbich (Contact Author)

Ohio State University (OSU) - Department of Psychology ( email )

1835 Neil Avenue
Columbus, OH 43210
United States

Ohio State University (OSU) - Department of Economics

Arps Hall
1945 N. High St.
Columbus, OH OH 43210
United States

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