Negotiations typically involve multiple issues: in addition to the transaction price, bargainers need to determine the scope of an agreement. We design a lab experiment to study multi-issue bargaining. We find that, for sufficiently rich bargaining institutions (repeated offers and bundling are possible), having information solely on the aggregate surplus of an agreement is a good substitute for being fully informed. We also study the causes for disagreement and find that improving information can have a detrimental effect on efficiency, in particular in large-surplus negotiations. Our findings have broad implications for the design of markets in which interaction occurs through bargaining.
- Online appendix
- Topics: bargaining, experimental economics