Transparency in Information Acquisition: A Bargaining Experiment
19 Pages Posted: 9 Aug 2006
Date Written: July 2006
We analyze how transparency affects information acquisition in a bargaining context, where proposers may chose to purchase information about the unknown outside option of their bargaining partner. Although information acquisition is excessive in all our scenarios we find that the bargaining outcome depends crucially on the transparency of the bargaining environment. In transparent games, when responders can observe whether proposers have acquired information, acceptance rates are higher. Accordingly, in transparent bargaining environments information is more valuable, both individually and socially.
Keywords: information acquisition, ultimatum experiment, transparency
JEL Classification: C91, D82
Suggested Citation: Suggested Citation