Never retreat, never surrender: the bargaining power of commitment in the Hawk-Dove game
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Universidad de Granada. Departamento de Teoría e Historia Económica
Palacio García, L.A.; Cortés Aguilar, A. Never retreat, never surrender: the bargaining power of commitment in the Hawk-Dove game. Universidad de Granada. Departamento de Teoría e Historia Económica (2010). (The Papers; 10/17). [http://hdl.handle.net/10481/31573]
This paper studies experimentally the conditions that improve bargaining power using threats in a negotiation process. Following Schelling’s (1960) ideas we choose the hawk-dove game because is the simplest negotiation environment with inequity distribution in equilibrium. The analysis is focused on three essential elements of commitment: the possibility of a player to announce his own actions, the credibility of these messages and the experience acquired in the negotiation process. The empirical evidence shows that, in the first period, subjects do not realize the bargaining power of commitment. When the game is repeated and experience increases, subjects gradually understand the advantages of a threat, turning the payoffs into their favor. Credibility is also relevant for the relation, if subjects can choose their message, it is common to find strategic liars, and their rivals punish this behavior.