How Communication Links Influence Coalition Bargaining: A Laboratory Investigation

Complexity of communication is one of the important factors that distinguishes multilateral negotiation from its bilateral cousin. We investigate how the communication configuration affects a three-person coalition negotiation. Restricting who can communicate with whom strongly influences outcomes, and not always in ways that current theory anticipates. Competitive frictions, including a tendency to communicate offers privately, appear to shape much of what we observe. Our results suggest that parties with weaker alternatives would benefit from a more constrained structure, especially if they can be the conduit of communication, while those endowed with stronger alternatives would do well to work within a more public communication structure that promotes competitive bidding.