Oechssler, Jörg ; Roider, Andreas ; Schmitz, Patrick W.
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Abstract
Negotiations frequently end in conflict after one party rejects a final offer. In a large-scale internet experiment, we investigate whether a 24-hour cooling-off period leads to fewer rejections in ultimatum bargaining. We conduct a standard cash treatment and a lottery treatment, where subjects receive lottery tickets for several large prizes - emulating a high-stakes environment. In the lottery treatment, unfair offers are less frequently rejected, and cooling-off significantly reduces the rejection rate further. In the cash treatment, rejections are more frequent and remain so after cooling-off. This treatment difference is particularly pronounced for subjects with lower cognitive abilities.
| Document type: | Working paper |
|---|---|
| Date Deposited: | 12 May 2009 13:16 |
| Date: | 2008 |
| Faculties / Institutes: | The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
| DDC-classification: | 330 Economics |
| Uncontrolled Keywords: | negotiations , ultimatum game , emotions , cooling-off , cognitive abilities , behavioral biases , internet experiment |
| Series: | Discussion Paper Series / University of Heidelberg, Department of Economics |
