Testing the emergence and effect of the reference outcome in an integrative bargaining situation

We describe and analyze an experiment in two-person, integrative bargaining. We test two hypotheses. First, that in this particular conflict situation a reference outcome emerges. Second, that the bargaining outcome is explained by a model developed in Gupta and Livne (1988). Both hypotheses are confirmed. This experiment supports the view that the reference outcome is an important factor in integrative bargaining and indicates that the Gupta-Livne model, originally developed as an axiomatic one, may also be a satisfactory descriptive model.

[1]  Scott A. Neslin,et al.  The Ability of Nash's Theory of Cooperative Games to Predict the Outcomes of Buyer-Seller Negotiations: A Dyad-Level Test , 1986 .

[2]  J. Nash.  THE BARGAINING PROBLEM , 1950, Classics in Game Theory.

[3]  A. Roth.  Game-theoretic models of bargaining: Toward a focal-point theory of bargaining , 1985 .

[4]  Zvi A. Livne,et al.  Resolving a Conflict Situation with a Reference Outcome: An Axiomatic Model , 1988 .

[5]  M. Gilly,et al.  Consumer Behavior and Energy Policy , 1985 .

[6]  F. Robert Dwyer,et al.  Bargaining in an Asymmetrical Power Structure , 1981 .

[7]  Orley Ashenfelter,et al.  Models of Arbitrator Behavior: Theory and Evidence , 1983 .

[8]  E. Kalai,et al.  OTHER SOLUTIONS TO NASH'S BARGAINING PROBLEM , 1975 .

[9]  H. Raiffa.  The art and science of negotiation , 1983 .

[10]  Donald R. Lehmann,et al.  Models of Cooperative Group Decision-Making and Relative Influence: An Experimental Investigation of Family Purchase Decisions , 1987 .

[11]  Louis W. Stern,et al.  Assessing the Predictive Accuracy of Two Utility-Based Theories in a Marketing Channel Negotiation Context , 1986 .

[12]  Sunil Gupta.  Modeling integrative, multiple issue bargaining , 1989 .

[13]  Scott A. Neslin,et al.  Nash's Theory of Cooperative Games as a Predictor of the Outcomes of Buyer-Seller Negotiations: An Experiment in Media Purchasing , 1983 .

[14]  Jehoshua Eliashberg,et al.  Multiple Business Goals Sets as Determinants of Marketing Channel Conflict: An Empirical Study , 1984 .

[15]  Stephen W. Clopton.  Seller and Buying Firm Factors Affecting Industrial Buyers’ Negotiation Behavior and Outcomes , 1984 .

[16]  M. Bazerman.  Norms of Distributive Justice in Interest Arbitration , 1985 .