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Lying about the price? Ultimatum bargaining with messages and imperfectly observed offers

Anbarcı, N.; Feltovich, N.; Gürdal, M.Y.

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Authors

N. Feltovich

M.Y. Gürdal



Abstract

We introduce the taxicab game, related to the ultimatum game and Gehrig et al.'s (2007) yes/no game. The proposer makes an offer, and simultaneously sends a cheap talk message indicating (possibly falsely) the amount of the offer. The responder observes the message with certainty and the offer with probability p before accepting or rejecting the offer. We investigate versions with p = 0 and p = 0.5 along with the ultimatum game as a baseline. Intuition and a model comprising both standard economic agents and others who dislike inequity, lies and lying provide clear predictions that our experimental results support. As the likelihood increases of offers being seen, the offers themselves increase, messages over-state them less, and responders are more likely to accept (even when the offer is unseen). Also, responders are more likely to accept after truthful messages than after lies or when no message is sent.

Citation

Anbarcı, N., Feltovich, N., & Gürdal, M. (2015). Lying about the price? Ultimatum bargaining with messages and imperfectly observed offers. Journal of Economic Behavior and Organization, 116, 346-360. https://doi.org/10.1016/j.jebo.2015.05.009

Journal Article Type Article
Acceptance Date May 11, 2015
Online Publication Date May 20, 2015
Publication Date May 20, 2015
Deposit Date Aug 16, 2018
Publicly Available Date Aug 29, 2018
Journal Journal of Economic Behavior and Organization
Print ISSN 0167-2681
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 116
Pages 346-360
DOI https://doi.org/10.1016/j.jebo.2015.05.009
Public URL https://durham-repository.worktribe.com/output/1317169

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