Steve Tadelis (Haas School of Business University of California Berkeley)

“Sequential Bargaining in the Field: Evidence from Millions of Online Bargaining Interactions”

Abstract: We study patterns of behavior in bilateral bargaining situations using a rich, new dataset describing over 88 million listings from eBay’s Best Offer platform, with back-and-forth bargaining occurring in over 25 million of these listings. We document patterns of behavior and relate them to “rational” and “psychological” theories of bargaining and find that bargaining patterns are consistent with elements of both approaches. Most notably, players with more bargaining strength typically receive better outcomes, and players exhibit equitable behavior by making offers that split-the-difference between negotiating positions. We are publicly releasing this new dataset to support additional empirical bargaining research.