Experimental Design
In the experiments participants will be matched in groups of 3, getting assigned the roles of either participant A, participant B or participant C. There will be 4 treaments named 'baseline', 'random anchor', 'strategic anchor' and 'signaling anchor'. In all treatments an amount Y is to be distributed among the 3 group members in case of eventual negotiation agreement. In case of disagreement, 0 points will be distributed (There will be a showup-fee on top of the points redistributed in the game in the experiment).
Treatments
In the 'baseline treatment', participant A must choose a value X\in\left[0,Y\right]. Subsequently the value of 'proposal' X will be communicated to participant B. Participant B choses a highest acceptable offer. If X is higher than the highest acceptable offer the offer is rejected, otherwise it is accepted. If B accepts the offer the payoffs for participants A,B and C will respectively be X,\frac{Y-X}{2},\frac{Y-X}{2}. There is no communication allowed between the three participants and participant C, although affected by the choices of A and B, will make no active decisions.
In the 'random anchor' treatment all procedures are similar to the baseline except for one detail. Before participant A makes her decision on the value of X, a computer first draws a random integer number R from a uniform distribution ranging from 0 to Y. Participant A is shown the random number R and is asked wether she is planning to choose X to be larger (or equal) or smaller than R. After answering this question participant A continues as in the baseline by choosing X. Neither the random number R, nor the question response by participant A will be communicated to participants B and C and this is common knowledge. Subsequently the value of 'proposal' X will be communicated to participant B, who rejects or accepts based on his/her highest acceptable offer. If B accepts the offer the payoffs for participants A,B and C will respectively be X,\frac{Y-X}{2},\frac{Y-X}{2}.
In the 'strategic anchor' treatment the procedures are again similar to those in the baseline except for the following. Before participant A makes her decision on the value of X, participant C has to choose an integer number R with R\in\left[0,Y\right]. After this, participant A is shown the chosen number R and is asked wether she is planning to choose X to be larger (or equal) or smaller than R. After answering this question participant A continues as in the baseline by choosing X. Neither the anchoring number R, nor the question response by participant A will be communicated to participant B (and neither will the question response to participant C) and this is common knowledge. Subsequently the value of 'proposal' X will be communicated to participant B, who rejects or accepts based on his/her highest acceptable offer.. If B accepts the offer the payoffs for participants A,B and C will respectively be X,\frac{Y-X}{2},\frac{Y-X}{2}.
In the 'signalling anchor' the procedures are exactly similar to those in the 'strategic anchor' treatment, except that this time the anchor number R will be chosen by participant B instead of participant C, so in this treatment participant C is again a passive participant.