Gender Differences in Alternating-Offer Bargaining: An Experimental Study

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A laboratory study is carried out to analyze the relationship between gender differences and ambiguity regarding the sharing norms in structured alternating-offer bargaining. Symmetric environments show the lowest ambiguity regarding the sharing norms, as the 50:50 split emerges as the unique sensible norm, where we find no hard evidence for gender differences. In asymmetric environments, where one bargaining party is expected to get more than the other (due to empowerment, entitlement, or informational asymmetries) yet there is ambiguity about sharing norms, men are less likely to reach an agreement, and when they do, they obtain a larger share of the pie. As a result, men and women show similar overall earnings but earnings are lower when bargaining with men. Even in asymmetric environments where ambiguity is reduced through the provision of agreements used by other participants, we find suggestive evidence that gender differences diminish.

Keywords: alternating-offer bargaining, gender differences, laboratory experiment