Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/73483 
Year of Publication: 
2010
Series/Report no.: 
Working Papers in Economics and Statistics No. 2010-27
Publisher: 
University of Innsbruck, Department of Public Finance, Innsbruck
Abstract: 
This experimental study investigates two bargaining games with twosided incomplete information between a seller and a buyer. In the first game with no outside options many subjects do not use the incomplete information to their advantage as predicted. We find that a model with adjusting priors better explains observed behavior. The second game gives the buyer the option to buy via search or return to bargaining. Here many buyers choose a bargaining agreement when a search outcome is predicted. For those who opt out, search outcomes are overall efficient and behavior is relatively close to the optimal search policy.
Subjects: 
Bargaining Experiment
Outside Option
Search
JEL: 
C91
C78
D83
D82
Document Type: 
Working Paper

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