We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: April 2nd (Tuesday), 16:00 ~ 17:20
2. Where: Building 9, 3rd #9303
3. Speaker: Prof. Lim, Wooyoung (HKUST)
4. Topic: Bargaining and Time Preferences: An Experimental Study
5. Research field: Managerial Economics
* Language: Korean

[Abstract]
Several experimental studies in the literature investigated how time preferences govern bargaining outcomes in the canonical, infinite-horizon alternating-offers bargaining model of (Rubinstein, 1982, Econometrica) but the evidence is mixed. We revisit the problem with a novel experimental design in which bargaining game payoffs are paid over a long period of time with different payment windows (weekly or monthly) exogenously assigned to each subject. Using this effective discounting procedure, we test theoretical predictions presented 1) in the absence of dynamically inconsistent time-preferences (Rubinstein, 1982, Econometrica) and 2) in the presence of such time-inconsistent preferences (Schweighofer-Kodritsch, 2018, Econometrica). We find unambiguous experimental support for several major theoretical predictions. In all treatments, a vast majority of agreements was reached with no or minor delays, and with a significant and substantial first-mover advantage. In the treatments without any delayed (1 week) payment schedule, the bargainer with a larger effective discount factor received a larger share. In the treatment in which the immediate agreement was made impossible by the payment delay introduced to both bargainers, however, the difference in the agreed shares between the bargainers with different effective discount factors became less significant statistically and less substantial in magnitude. These results suggest that bargainers' discount function is quite flat after failing to achieve an immediate agreement