'A MATTER OF TRUST' : EFFECTS OF COMMUNICATION ON THE EFFICIENCY AND DISTRIBUTION OF OUTCOMES

Abstract In two studies of bilateral bargaining with asymmetric information, we show that the communication medium in which the bargaining takes place, affects the efficiency and distribution of outcomes. The results reflect different degrees of truth-telling and trust across the media. We present a conceptualization of how the effects of communication media can be incorporated into behavioral decision research and game theoretic models of bargaining.

[1]  R. Frank.  Passions Within Reason: The Strategic Role of the Emotions , 1990 .

[2]  Valerie A. Ramey,et al.  The effects of market organization on conspiracies in restraint of trade , 1984 .

[3]  R. Swensson.  Cooperation in the prisoner's dilemma game I: The effects of asymmetric payoff information and explicit communication , 1967 .

[4]  Kalyan Chatterjee,et al.  Bargaining under Incomplete Information , 1983, Oper. Res..

[5]  William A. Donohue,et al.  New Directions in Negotiation Research , 1983 .

[6]  M. Spence.  Job Market Signaling , 1973 .

[7]  R. Mark Isaac,et al.  Communication and Free-Riding Behavior: The Voluntary Contribution Mechanism , 1988 .

[8]  R. Radner,et al.  The Sealed-Bid Mechanism: An Experimental Study* , 1989 .

[9]  William Samuelson,et al.  I Won the Auction But Don't Want the Prize , 1983 .

[10]  P. Ekman.  Telling lies: clues to deceit in the marketplace , 1985 .

[11]  John Orbell,et al.  Explaining discussion-induced cooperation. , 1988 .

[12]  Gary E. Bolton.  A Comparative Model of Bargaining: Theory and Evidence , 1991 .

[13]  D. Wallace,et al.  Communication, group loyalty, and trust in the PD game , 1969 .

[14]  R. I. Sutton,et al.  Organizational behavior: linking individuals and groups to organizational contexts. , 1993, Annual review of psychology.

[15]  James L. Loomis.  Communication, the Development of Trust, and Cooperative Behavior , 1959 .

[16]  R. Cialdini.  Influence: Science and Practice , 1984 .

[17]  Alvin E. Roth,et al.  The Effects of Communication and Information Availability in an Experimental Study of a Three-Person Game , 1977 .

[18]  R. Gibbons.  Game theory for applied economists , 1992 .

[19]  Sheryl B. Ball,et al.  An evaluation of learning in the bilateral winner's curse , 1991 .

[20]  John Orbell,et al.  Not me or thee but we: the importance of group identity in eliciting cooperation in dilemma situatio , 1988 .

[21]  Robert Forsythe,et al.  COMMUNICATION IN THE BATTLE OF THE SEXES GAME , 1989 .

[22]  Amnon Rapoport,et al.  Within- and between-group communication in intergroup competition for public goods☆ , 1989 .

[23]  M. Rabin.  Communication between Rational Agents , 1990 .

[24]  M. Satterthwaite,et al.  Efficient Mechanisms for Bilateral Trading , 1983 .

[25]  George A. Akerlof.  The Market for “Lemons”: Quality Uncertainty and the Market Mechanism , 1970 .