Learning about Bargaining from eBay’s Best Offer Platform

12:00 pm March 27, 2019

Cotting House Conference Room, HBS

Abstract: The economics literature on bargaining is rich in theory and experiments and poor in empirical work, particularly from real-world bargaining. Data from online negotiations on eBay’s “Best Offer” platform offer a unique chance to remedy this. In that setting we document patterns of behavior and relate them to “rational” and “psychological” theories of bargaining and find that bargaining patterns are consistent with elements of both approaches. Most notably, players with more bargaining strength typically receive better outcomes, and players exhibit equitable behavior by making offers that split-the-difference between negotiating positions. The setting also proves useful for studying the role of communication in bargaining. We show how documented “round number” effects in bargaining can be explained by standard cheap-talk models of communication, and also the important role of communication in facilitating bargaining efficiency. This talk will survey three papers in our “best offer” research agenda. Two of the three are already available from my website below, and the third will be soon (hopefully). https://sites.google.com/a/umich.edu/mrb/research

A buffet lunch will be available at 11:45 a.m. The talk will begin at 12:00 p.m.


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