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International Association for Conflict Management 33rd Annual Conference

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Sequential Bargaining in the Field: Evidence from Millions of Online Bargaining Interactions

We study patterns of behavior in bilateral bargaining situations using a rich, new dataset describing back-and-forth sequential bargaining occurring in over 25 million listings from eBay's Best Offer platform. We compare observed behavior to predictions from the large theoretical bargaining literature. Robust empirical findings that existing models cannot rationalize include reciprocal (and gradual) concession behavior and delayed disagreement. Another robust pattern at odds with existing theory is that players exhibit a preference for making and accepting offers that split the difference between the two most recent offers. These observations suggest that behavioral norms, which are neither incorporated nor explained by existing theories, play an important role in the success of bargaining outcomes. We have made this data publicly available to spur additional research in negotiations using field data.

Thomas Blake
eBay
United States

Matthew Backus
Columbia University
United States

Bradley Larsen
Stanford University
United States

Steve Tadelis
UC Berkeley
United States

 


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