Communication in Bargaining Experiments

Gary Charness

in The Oxford Handbook of Economic Conflict Resolution

Published in print September 2012 | ISBN: 9780199730858
Published online December 2012 | | DOI:

Series: Oxford Handbooks

 Communication in Bargaining Experiments

More Like This

Show all results sharing these subjects:

  • Economics
  • Microeconomics
  • Econometrics and Mathematical Economics


Show Summary Details


This article looks at evidence of the effect of communication in bargaining, even in settings in which economic theory predicts that communication will have no effect. It specifically presents data from various bargaining experiments. It also looks at the impact of cheap talk in laboratory experiments involving principal–agent and buyer–seller interactions. The possible outcome of communicating a the greater compliance and a decreased necessity for further legal battles. It is noted that communication has led to substantially better social outcomes. The impact of communication depends on the content of the communication. It is then shown that nonbinding and costless communication is typically beneficial in attaining better and more efficient outcomes in bargaining environments, including in principal–agent and buyer–seller interactions. There are still a number of cautionary notes that need to be made with regard to when statements are trustworthy and how communication influences bargaining outcomes in asymmetric environments.

Keywords: communication; bargaining; economic theory; principal–agent interaction; buyer–seller interaction; trustworthy

Article.  5344 words. 

Subjects: Economics ; Microeconomics ; Econometrics and Mathematical Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.