Sequential Bargaining in the Field: Evidence from Millions of Online Bargaining Interactions

42 Pages Posted: 12 Mar 2018

See all articles by Matthew Backus

Matthew Backus

Cornell University - Department of Economics

Thomas Blake

eBay Research Labs

Bradley Larsen

Stanford University - Department of Economics; National Bureau of Economic Research (NBER); eBay Research Labs

Steven Tadelis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: February 2018

Abstract

We study patterns of behavior in bilateral bargaining situations using a rich, new dataset describing over 88 million listings from eBay's Best Offer platform, with back-and-forth bargaining occurring in over 25 million of these listings. We document patterns of behavior and relate them to "rational" and "psychological" theories of bargaining and find that bargaining patterns are consistent with elements of both approaches. Most notably, players with more bargaining strength typically receive better outcomes, and players exhibit equitable behavior by making offers that split-the-difference between negotiating positions. We are publicly releasing this new dataset to support additional empirical bargaining research.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Backus, Matthew and Blake, Thomas and Larsen, Bradley and Tadelis, Steven, Sequential Bargaining in the Field: Evidence from Millions of Online Bargaining Interactions (February 2018). NBER Working Paper No. w24306. Available at SSRN: https://ssrn.com/abstract=3138311

Matthew Backus (Contact Author)

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

Thomas Blake

eBay Research Labs ( email )

2065 Hamilton Avenue
San Jose, CA
United States

Bradley Larsen

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

HOME PAGE: http://www.stanford.edu/~bjlarsen/research.html

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

eBay Research Labs ( email )

2065 Hamilton Avenue
San Jose, CA
United States

Steven Tadelis

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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