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Reference points in sequential bargaining
Last registered on September 17, 2020

Pre-Trial

Trial Information
General Information
Title
Reference points in sequential bargaining
RCT ID
AEARCTR-0006446
Initial registration date
September 14, 2020
Last updated
September 17, 2020 8:09 AM EDT
Location(s)
Region
Region
Primary Investigator
Affiliation
BI Norwegian Business School
Other Primary Investigator(s)
PI Affiliation
Institute of Transport Economics/Department of Security, Safety and Behaviour
PI Affiliation
University of Oslo/Department of Economics & CESAR
PI Affiliation
BI Norwegian Business School/Department of Economics & CESAR
Additional Trial Information
Status
In development
Start date
2020-10-05
End date
2021-06-30
Secondary IDs
Abstract
We introduce loss aversion in the infinite horizon, alternating offers model. When outside options serve as reference points, the equilibrium of our model follows the standard Rubinstein subgame perfect equilibrium. However, when reference points are given by the
resources players contribute to the pie, the bargaining outcome changes such that a player's share increases in her contribution.
The model is to be tested in two laboratory experiments. In experiment 1 random and earned outside options are compared. In experiment 2 random and earned contributions are compared.
External Link(s)
Registration Citation
Citation
Brekke, Kjell Arne et al. 2020. "Reference points in sequential bargaining." AEA RCT Registry. September 17. https://doi.org/10.1257/rct.6446-1.0.
Experimental Details
Interventions
Intervention(s)
Experiment 1: In alternating offers bargaining over a pie of 70 experimental currency units (ecu's) second movers are allocated an outside option of 20 or 60 ecu's respectively. Value of the pie is reduced by 10 percent each round of bargaining. Treatments: outside options are randomly allocated vs. allocated based on performance in a costly effort task.

Experiment 2: In alternating offers bargaining the pie size is the sum of contributions brought to the table by the bargaining parties. Bargainers are allocated a contribution of 20 or 60 ecu's, respectively. Contributions have zero value outside of the bargaining. Value of the pie is reduced by 10 percent each round of bargaining. Treatments: contributions are randomly allocated vs. allocated based on performance in a costly effort task.
Intervention Start Date
2020-10-05
Intervention End Date
2021-01-15
Primary Outcomes
Primary Outcomes (end points)
Average share of the pie obtained by the proposer in the final agreement, conditioned on treatment and value of outside option/relative contribution to the pie.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Delay in reaching agreement
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
For treatments, see "Intervention". Data consists of 8 independent matching blocks in each treatment. Each matching block consists of 8 subjects playing 6 bargaining games. In each matching block 4 bargaining pairs are formed randomly prior to each new bargaining game. Subjects are unique in each matching block. Roles as first and second mover are fixed in games 1-3, and reversed in games 4-6. Within each experiment treatment effects are based on averages taken over all six games, using matching blocks as units of observation. Based on a pilot the design provides a power of >90 percent for our main predictions, using a (non-parametric) Wilcoxon rank sum test and a significance level of 5 percent.
Experimental Design Details
Not available
Randomization Method
Randomization done by computer (using the software zTree).
Randomization Unit
Matching blocks (see "Experimental design").
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
32 matching blocks (16 in Experiment 1 and 16 in Experiment 2)
Sample size: planned number of observations
256 subjects
Sample size (or number of clusters) by treatment arms
Experiment 1: 8 matching blocks in treatment random allocation, 8 matching blocks in treatment earned allocation.
Experiment 2: 8 matching blocks in treatment random allocation, 8 matching blocks in treatment earned allocation.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Main outcomes: Proposer's pie share in random versus earned contributions when proser contributed 2/3 of the pie = 3.6 percentage points. With random contributions mean=0.555 and std=0.0558; with earned contributions mean=0.5591 and std=0.0702. Numbers based on a pilot with 2 matching blocks. 8 independent matching blocks -> power > 90 percent, given 5 percent significance level and Wilcocon rank sum test. Proposer's pie share in random versus earned contributions when proser contributed 1/3 of the pie = -15.3 percentage points. Variances are smaller and 8 matching blocks suffices for power>90 percent also here.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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