Discussion paper

DP6807 Cooling-Off in Negotiations - Does It Work?

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.


Schmitz, P, A Roider and J Oechssler (2008), ‘DP6807 Cooling-Off in Negotiations - Does It Work?‘, CEPR Discussion Paper No. 6807. CEPR Press, Paris & London. https://cepr.org/publications/dp6807