Integrative and Distributive Communication in a Coasian Bargaining Lab Experiment

Authors: Michael Weir*, University of Rhode Island, Catherine M. Ashcraft, University of New Hampshire, Todd Guilfoos, University of Rhode Island, Natallia Leuchanka, University of New Hampshire, Emily Vogler, Rhode Island School of Design, Bridie McGreavy, University of Maine
Topics: Environment
Keywords: bargaining, group decision making, language
Session Type: Paper
Day: 4/7/2019
Start / End Time: 2:00 PM / 3:40 PM
Room: Jefferson, Marriott, Mezzanine Level
Presentation File: No File Uploaded

Environmental issues are often centered around market failures such as externalities and/or asymmetric information. Stakeholder engagement and bargaining can be an important way to map difficult and complex policy debates about these environmental issues into desired outcomes. A key aspect of bargaining is the use of communication as a tool to coordinate outcomes, understand perspectives, and share private information with the goal of advocating for desired outcomes. While some generalized facts about communication in bargaining have been illustrated, e.g. communication tends to increase efficiency in certain settings, with some exceptions, the process of how people use language or how different ‘types’ of communication lead to better outcomes is still not sufficiently understood. The process of communication is a critical aspect of stakeholder bargaining and policy making. We test this proposition formally in a multiparty Coasian bargaining lab experiment. We prompt parties to use either position-based arguments that focus on what outcome they want, or interest-based arguments that focus on why they want an outcome and test the impact of these prompts on bargaining strategies and communication. Our experimental design uses a three-party bargaining game in which there is private information about payouts. We identify efficiency gains (or losses) associated with the use of distributive or integrative bargaining strategies, which we hypothesize result from position-based and interest-based prompts, respectively. We extend the literature on bargaining by framing our novel lab experiment in a specific environmental context while incorporating real-world bargaining tools into our pre-play communication prompts of position- or interest-based arguments.

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