Citation

Discussion Paper Details

Please find the details for DP6807 in an easy to copy and paste format below:

Full Details

Title: Cooling-Off in Negotiations - Does It Work?

Author(s): J�rg Oechssler, Andreas Roider and Patrick W. Schmitz

Publication Date: April 2008

Keyword(s): behavioural biases, cognitive abilities, cooling-off, emotions, internet experiment, negotiations and ultimatum game

Programme Area(s): Industrial Organization and Labour Economics

Abstract: Negotiations frequently end in conflict after one party rejects a final offer. In a large-scale internet experiment we investigate whether a 24-hour cooling-off period leads to fewer rejections in ultimatum bargaining. We conduct a standard cash treatment and a lottery treatment, where subjects received lottery tickets for several large prizes - emulating a high-stakes environment. In the lottery treatment, unfair offers are less frequently rejected, and cooling-off significantly reduces the rejection rate further. In the cash treatment, rejections are more frequent and remain so after cooling-off. This treatment difference is particularly pronounced for subjects with lower cognitive abilities.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6807

Bibliographic Reference

Oechssler, J, Roider, A and Schmitz, P. 2008. 'Cooling-Off in Negotiations - Does It Work?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6807