The Hidden Clues in Online Bargaining
Thu Feb 13 2025
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Ever wondered if the time it takes to respond to an offer on online platforms like eBay can reveal more than just a person's decision? Well, it turns out that it can give away some strategic information.
The traditional view in game theory is that decision-makers have a preplanned strategy for every possible situation. However, this new study suggests that even strategic decisions can be influenced by the time it takes to make a choice.
Researchers looked at data from eBay to see if the time it takes to accept or reject an offer can reveal private information. They found that both buyers and sellers take much longer to accept bad offers and to reject good offers. This pattern was seen in both preexisting and experimental data, showing that the size of the offer affects the response time.
The study also found that buyers are less likely to make a counteroffer if the seller takes a long time to reject their offer. This goes against the idea that buyers would be more persistent in negotiations.
The researchers used a model called the drift-diffusion model (DDM), which is usually used for quick decisions, to explain decisions that take hours or even days. This model showed that experienced sellers are more likely to accept offers and are less cautious.
So, what does this all mean? It means that strategic decisions aren't always as preplanned as game theory suggests. The time it takes to make a decision can reveal a lot about a person's strategy, and this needs to be considered in game theory. It also shows that the DDM can be used for much slower decisions than previously thought.
The implications of this study are significant. It suggests that game theory needs to consider response time as a strategic variable. This could change how we understand and predict behavior in strategic settings.
The study also highlights the importance of considering the broader context of decisions. It's not just about the decision itself, but also about the time it takes to make that decision. This could have important implications for fields like economics, psychology, and even artificial intelligence.
In conclusion, the time it takes to make a decision in online bargaining can reveal a lot about a person's strategy. This challenges traditional views in game theory and shows that the DDM can be used for much slower decisions than previously thought.
