Introduction

The experiment starts once 4 participants have logged in.

You will play 4 rounds. In each round, you will be matched with one other participant. Your opponent will usually change from round to round.

In each round, you and your opponent bargain over 100 points. Your task is to decide how these 100 points should be split between the two of you.

Outside option

At the start of each round, the computer randomly assigns an outside option to each player. The outside option can be any whole number from 0 to 100, with all values equally likely.

Your outside option is the number of points you receive if no agreement is reached.

You will see your own outside option at the start of each round. You will not see your opponent's outside option.

Offers

During bargaining, both players can make offers.

An offer states how many points you give to the other player.

This is important: if you offer 45 points, you are offering 45 points to your opponent and keeping 55 for yourself.

Likewise, if your opponent offers you 30 points and you accept, you receive 30 points and your opponent receives 70.

You can have at most 2 of your own active offers at the same time.

You may make a new offer, revise one of your existing offers by submitting a replacement offer, or cancel one of your active offers.

You will also see the offers made by your opponent and can accept or reject them.

Once an offer is accepted, the round ends immediately. Accepted offers cannot be canceled.

When does a round end?

A bargaining round ends in one of three ways.

First, the round ends if one player accepts an offer.
Second, the round may end randomly before an agreement is reached. This is called a bargaining breakdown. There is no breakdown risk during the first 60 seconds. Starting at 60 seconds, bargaining can break down every 10 seconds with probability 8% at each such time point (60, 70, 80 seconds, and so on).
Third, the round ends if either player clicks "Abandon negotiations".

Important: Each round is time-limited. If you do not submit or respond before a bargaining breakdown, the current round ends and both players receive their outside options. The non-responding participant will not take part in future bargaining rounds.

Earnings

If you reach an agreement, your earnings equal the number of points assigned to you in that agreement.

If no agreement is reached, your earnings equal your outside option.

If agreement is reached: Earnings = number of points you receive in the agreement.

If no agreement is reached: Earnings = your outside option.

Examples

Example 1: Your outside option is 45. You offer 43 points to your opponent. Your opponent accepts. You keep 57 points. Your earnings are 57 ECU.

Example 2: Your outside option is 45. Your opponent offers you 42 points and you accept it. Your earnings are 42 ECU.

Example 3: Your outside option is 25. No offer is accepted. The round ends because of a bargaining breakdown. Your earnings are 25 ECU.

Example 4: Your outside option is 70. No offer is accepted. One player ends the negotiation. Your earnings are 70 ECU.

Payment procedure

At the end of the experiment, one of the 4 rounds will be selected at random for payment.

Your payment from this task is: payment in pounds = ECU earned in the selected round x 0.03.

Example: if you earn 68 ECU in the selected round, your payment is 68 x 0.03 = 2.04 pounds.