Transparency in Information Acquisition: A Bargaining Experiment

19 Pages Posted: 9 Aug 2006

See all articles by Thomas Gehrig

Thomas Gehrig

University of Vienna

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Rene Levinsky

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Date Written: July 2006

Abstract

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

Gehrig, Thomas and Güth, Werner and Levinsky, Rene, Transparency in Information Acquisition: A Bargaining Experiment (July 2006). Available at SSRN: https://ssrn.com/abstract=923357 or http://dx.doi.org/10.2139/ssrn.923357

Thomas Gehrig (Contact Author)

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

Werner Güth

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Rene Levinsky

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

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