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ECON 7381-001: Bargaining and Negotiation

Fall, 2008
Wednesday, 2:30-5:30
GR 3.602

Professor Rachel Croson


2.514 Green Hall
crosonr@utdallas.edu
972-883-6016

Introduction

Large literatures in both experimental bargaining (from economics) and negotiation


(from psychology and management) have now been developed. However, these two
areas are rarely linked.

This seminar is designed to introduce PhD students to the literatures in these two fields,
identifying their similarities and differences. The first half of the course will be primarily
lecture-based, and will provide a broad overview of past research. In the second half of
the course, students will choose a particular area of interest, and develop and present a
more in-depth review of previous research in that area. At the end of the course, students
will produce a paper proposing an original and publishable research topic in the field.

Textbooks

For an overview of experimental bargaining, students can read Chapter 4 by Alvin Roth
in the Handbook of Experimental Economics and sections of Colin Camerer’s Behavioral
Game Theory. For an overview of negotiation, students can read The Mind and Heart of
the Negotiator by Leigh Thompson. We will refer to sections from these readings at the
appropriate place in the course, but students are expected to master the material in these
sources by the end of the course.
Requirements

This course involves a heavy reading load. In the beginning of the course students read
surveys where available and one or two original papers per week, toward the end they
read a series of original research papers (both published and unpublished) related to their
field of interest. At the end of the course, students will produce a paper proposing an
original and publishable research topic in the field

Students are evaluated based on four deliverables.

(1) Nine written referee reports (20%): In each of nine classes, students will choose
an original paper to read and to write up. The written reports should be relatively
short 1-2 pages, and should not include a summary of the paper itself. Instead,
students should focus on shortcomings of the paper, and suggest more research
that should be done to nail down or further explore the results presented. These
reports thus should be critical, as though the student were writing to the author,
identifying holes in the paper, and recommending ways to fix them.
(2) Nine presentations of referee reports (10%): In each of the nine classes, students
will present their referee report to the class. This presentation may include a
summary of the paper, as well as the paper’s limitations and suggestions for
addressing them.

(3) Z-Tree assignment (20%): Toward the end of the class each student will be
expected to learn Z-Tree, a computer program which can be customized for
running experiments. Mastering the program should take 1-2 days. Students will
be expected to program a sample bargaining experiment, and demonstrate their
program to the professor (and possibly to the class, if time permits).

(4) Final paper (50%): At the end of the course students will be expected to
write and present a final paper. This paper should be a publishable paper in bargaining or
negotiation, up to but not including the results. The paper should thus include an
introduction / motivation section, a literature review, a section on experimental design
and implementation and (if possible) a link to an appropriate Z-tree program.
Schedule of Classes

August 27: Introduction and Overview


Reading: Croson “Contrasting Methods and Comparative Findings
in Psychology and Economics”
Bazerman et al. “Negotiation”

September 3: Bargaining: Ultimatum / Dictator / Alternating Offers


Reading: Roth section 4.I.B
Thompson pp. 193-212
Camerer pp. 43-67; 76-82
Guth, Schmittberger & Schwarze, "An experimental analysis of
ultimatum bargaining.”
Forsythe et al.“Fairness in simple bargaining experiments.”
Croson “Information in Ultimatum Games”
+1 original article

September 10: Negotiation: Distributive Negotiation


Reading: Thompson pp. 15-29
Pinkley et al. “The Impact of Alternatives to Settlement in Dyadic
Negotiation”
Huber & Neale “Effects of Cognitive Heuristics and Goals”
Hilty & Carnevale “Black Hat/White Hat Strategy”
+1 original article

September 17: Negotiation: Integrative Negotiation


Reading: Thompson pp. 43-67
Thompson “Information Exchange in Negotiation”
Bazerman et al “Integrative Bargaining in a competitive market”
Carnevale & Isen “The influence of positive affect”
Carnevale et al. “Looking and competing”
+1 original article

September 24: Bargaining: Nash Bargaining / Cooperative Game Theory


Reading: Roth, 4.I.A
Camerer pp. 151-160
Roth and Murnighan 1982 “The Role of Information in
Bargaining: An Experimental Study”
Murnighan and Roth 1980 “The Effect of Group Size and
Communication Availability on Coalition Bargaining in a
Veto Game”
Gomes et al. “Mergers and Acquisitions”
+1 original article

October 1: Negotiation: Groups and Teams


Reading: Thompson pp. 140-167
Thompson et al.” Team negotiation: an examination of
integrative and distributive bargaining.”
Polzer et al. “Interest alignment and coalitions in
multiparty negotiation”
Mannix et al. “Negotiation in small groups”
+1 original article

October 8: Bargaining: Trust, Principal-Agents and Other


Reading: Camerer pp. 83-117
Berg, Dickhaut & McCabe “Trust, Reciprocity and Social History”
Buchan et al. “Swift Neighbors and Persistent Strangers”
Fehr, Kirchsteiger & Riedl “Does Fairness Prevent Market Clearing?”
+1 original article

October 15: Bargaining and Negotiation: Social Dilemmas


Reading: Thompson pp. 213-261
Croson & Mnookin “Does Disputing Through Agents Enhance
Cooperation?
Buckley & Croson“Income and Wealth Heterogeneity”
Dawes “Social Dilemmas”(1980)
+1 original article

October 22: Bargaining and Negotiation: Emotions


Reading: Thompson pp. 168-192
Kopelman et al. “The three faces of Eve”
Allred et al. “The Influence of Anger and Compassion on
Negotiation Performance”
Pilluta and Murnighan “Unfairness, Anger, and Spite: Emotional
Rejections of Ultimatum Offers”
Capra “Mood-Driven Behavior in Strategic Interaction”
+1 original article

October 29: Bargaining and Negotiation: Context (Media, Culture, …)


Reading: Thompson pp. 262-290
Roth 4.II.A and 4.II.B
Camerer pp. 68-75
Moore et al. “Long and Short Routes to Success”
Croson, “Look at Me When You Say That: An Electronic
Negotiation Simulation”
Buchan et al."Let's get personal”
Buchan et al. “When Do Fair Beliefs Influence Bargaining
Behavior?”
Brett & Okumura “Inter- and Intracultural Negotiation”
Chan et al “Comparing negotiation across cultures”
+1 original article

November 5 Bargaining and Negotiation: Lying and Deception


Boles et al. “Deception and Retribution in Repeated
Ultimatum Bargaining”
Croson et al. “Cheap talk in bargaining experiments: lying
and threats in ultimatum games”
Schweitzer & Croson, “Curtailing deception: The impact
of direct questions on lies and omissions”
O’Connor & Carnevale “A Nasty but Effective Negotiation
Strategy”
+1 original article.
November 12 Student Presentations
readings to be assigned

November 19 Student Presentations


readings to be assigned

November 26 Student Presentations


readings to be assigned
December 3 Conclusions and Summary

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