On the Strategic Use of Response Times

72 Pages Posted: 25 Aug 2017 Last revised: 28 Aug 2017

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: August 27, 2017

Abstract

People tend to respond quickly facing easy decisions and slowly facing difficult decisions. This begs the question of whether others can exploit this information. In a two-stage bargaining experiment, we find that buyers tend to quickly reject unreasonably high prices, but take more time to respond to offers that are close to their valuation. This allows sellers to infer buyers’ values from observable response times (RT), creating an incentive for buyers to manipulate their RT, which they do. 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, On the Strategic Use of Response Times (August 27, 2017). 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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