Cheap talk in bargaining experiments: Lying and threats in ultimatum games

Rachel Croson*, Terry Boles, J. Keith Murnighan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

118 Scopus citations

Abstract

In most models of bargaining, costless and unverifiable lies about private information and incredible threats about future actions are considered cheap talk and do not impact outcomes. In practice, however, this type of talk is often an integral part of bargaining. This experiment examines the impact of cheap talk in an ultimatum bargaining setting with two-sided imperfect information. In contrast to previous work, the experiment provides an opportunity for deceptions to be revealed and punished. Results show that lies about private information and (incredible) threats of future actions do influence bargaining outcomes (offers and responses) in both the short- and long-term.

Original languageEnglish (US)
Pages (from-to)143-159
Number of pages17
JournalJournal of Economic Behavior and Organization
Volume51
Issue number2
DOIs
StatePublished - Jun 1 2003

Keywords

  • Cheap talk
  • Experimental bargaining
  • Ultimatum games

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Fingerprint

Dive into the research topics of 'Cheap talk in bargaining experiments: Lying and threats in ultimatum games'. Together they form a unique fingerprint.

Cite this