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Elicitation effects in a multi-stage bargaining experiment

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Abstract

We examine elicitation effects in a multi-stage bargaining experiment with escalating stakes conducted under direct-response and strategy-method elicitation. We find a significantly greater incidence of decisions leading to bargaining failure under direct responses. In addition, the predictive power of alternative risk attitude measures differs between the elicitation methods. Potential sources of the effects and resulting implications are discussed.

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Notes

  1. Thanks to an anonymous referee for pointing out this possibility.

  2. Additional pure strategies exist if we also consider those which specify actions for nodes which can never be reached by virtue of previous decisions. We do not consider these in the following as they are behaviourally equivalent (i.e. generate identical payoffs) to the ones we are considering.

  3. Measured risk attitudes may differ between subjects either due to underlying preferences which the instruments are meant to measure or due to bias from the individually experienced game outcome. To disentangle the two we need to control for stage as risk appetite may influence progression in the game. We compared stated risk preferences of subjects who were observed to take the same decision in a given stage but experienced a different action by their co-player. This test was repeated for every stage, for both risk measures and both elicitation methods.

  4. Each payoff point received was paid out at 1 RMB. At the time of the experiment, 1 RMB traded at 0.146 US $. In the area of China where the experiment was performed, students typically earn around 8 RMB an hour for casual work.

  5. We report Fisher exact 2-tail p-values in this section unless stated otherwise. The results are robust with respect to using χ 2-tests.

  6. We used the ordered Probit estimation method for all regressions reported in this section. All the results are robust with respect to using Tobit.

  7. In their meta-analysis of elicitation effects, experiments are classified as (a) either involving or not involving emotion or multiple stages and (b) showing either evidence, mixed or no evidence for elicitation effects. Two-tail χ 2-tests are then performed to examine whether the two groups in terms of (a) have different distributions over (b).

  8. Comparing hot and cold behaviour in terms of quantal responses is hampered by the fact that the former involves error at the level of each stage, and the latter at the level of the five reduced strategies (McKelvey and Palfrey 1998, p. 10).

  9. “When a response is produced solely by the [experiential] system, a person is conscious only of the result of the computation, not the process […] The result is accessible, but the process is not. In contrast, a person is aware of both the result and the process in a rule-based computation” (Sloman 1996, p. 6).

  10. See Charness et al. (2013) for a comparative overview of different risk preference elicitation methods.

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Authors and Affiliations

  1. Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham, NG8 1BB, UK

    Swee-Hoon Chuah, Robert Hoffmann & Jeremy Larner

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  1. Swee-Hoon Chuah
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  2. Robert Hoffmann
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  3. Jeremy Larner
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Correspondence to Robert Hoffmann.

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Chuah, SH., Hoffmann, R. & Larner, J. Elicitation effects in a multi-stage bargaining experiment. Exp Econ 17, 335–345 (2014). https://doi.org/10.1007/s10683-013-9370-z

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