Promises and Lies : a Theory of Pre-Play Negotiation

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Title: Promises and Lies : a Theory of Pre-Play Negotiation
Author: Miettinen, Topi
Contributor: University of Helsinki, Faculty of Social Sciences, Department of Political Science
Date: 2006-03-07
Language: en
Thesis level: Licentiate thesis
Abstract: Experiments suggest that communication increases the contribution of public goods (Ledyard, 1995) and also that people trade off the benefit of lying against the harm that they inflict on others (Gneezy, 2005). We construct a two-player model of pre-play negotiation that assumes the latter and implies the former finding. We call a strategy profile agreeable if an agreement to play accordingly would not be broken and if both players have an incentive to reach such an agreement. In a symmetric game with strategic substitutes, as the standard Cournot duopoly, the trading off of benefit and harm when lying implies that players' incentives to respect an agreement decrease with its efficiency. Such conflicts may be absent in symmetric games with (weak) strategic complements. In fact, in the linear public good game or the moral hazard in teams, an efficient agreement is agreeable if and only if any non-equilibrium action profile is agreeable. JEL Classification C72, C78, Z13.
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Subject: pre-play negotiation
game theory
noncooperative games
social preferences
bargaining theory
social norms
ei-yhteistoiminnalliset pelit
sosiaaliset normit
sosiaalinen pääoma
sosiaaliset verkostot

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