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Communication in multilateral bargaining with joint production

Published online by Cambridge University Press:  14 March 2025

Andrzej Baranski  and
Caleb A. Cox
Andrzej Baranski*
Affiliation:
Division of Social Science, New York University Abu Dhabi, Bldg A5 Office 1131, Saadiyat NYUAD Campus, Abu Dhabi, United Arab Emirates
Caleb A. Cox*
Affiliation:
Department of Economics, Virginia Commonwealth University, Box 844000, Snead Hall, 301 W. Main Street, 23284 Richmond, VA, USA
*
a.baranski@nyu.edu
cacox@vcu.edu
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Abstract

We experimentally investigate the effect of pre-bargaining communication on productive incentives in a multilateral bargaining game with joint production under two conditions: observable and unobservable investments. In both conditions, communication fosters fair sharing and is rarely used to pit individuals against each other. Proportional sharing arises with observable investments with or without communication, leading to high efficiency gains. Without investment observability, communication is widely used to truthfully report investments and call for equitable sharing, allowing substantial efficiency gains. Since communication occurs after production, our results highlight a novel indirect channel through which communication can enhance efficiency in social dilemmas. Our results contrast with previous findings on bargaining over an exogenous fund, where communication leads to highly unequal outcomes, competitive messages, and virtually no appeals to fairness.

Keywords

Multilateral bargainingCommunicationProfit sharing

JEL classification

H41: Public Goods C78: Bargaining Theory • Matching Theory D72: Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior D71: Social Choice • Clubs • Committees • Associations
Type
Original Paper
Information
Experimental Economics , Volume 26 , Issue 1 , March 2023 , pp. 55 - 77
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2022

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