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Article
An Empirical Analysis of Bargaining with Voluntary Transmission of Private Information
Journal of Legal Studies (2004)
  • Paul Pecorino, University of Alabama
  • Mark Van Boening
Abstract

We conduct an experimental analysis of bargaining under asymmetric information, where the dispute resolution mechanism can be interpreted as either a civil trial or conventional arbitration. In our treatment, we allow for credible and costless transmission of private information. Consistent with the theory, we find that plaintiffs with strong cases tend to reveal their private information to the defendant. As a result, this group of plaintiffs experiences a significant drop in their dispute rate under the treatment. We also consider a cheap‐talk treatment under which transmitted information is not credible. When cheap talk is allowed, transmitted messages are not entirely ignored, but there is no reduction in the dispute rate for plaintiffs with strong cases.

Keywords
  • Pretrial Bargaining,
  • Asymmetric Information,
  • Bargaining Experiment
Disciplines
Publication Date
January, 2004
Citation Information
Paul Pecorino and Mark Van Boening. "An Empirical Analysis of Bargaining with Voluntary Transmission of Private Information" Journal of Legal Studies Vol. 33 (2004)
Available at: http://works.bepress.com/paul_pecorino/26/