Bargaining for the Last Mile Cost and Environmental Preferences of Stakeholders: An Economic Experiment

We aim at studying how environmental preferences matter when consumers negotiate with sellers in order to contract for delivery at home. To do that, we build an economic laboratory experiment where pairs of participants bargain for choosing either the click-and-collect option, which is free for consumer but implies for him private transportation costs, or the delivery-at-home option, which is pricey for him, but externalize transportation cost to the seller. In addition, in our game, transportation triggers environmental costs that are borne by both partners. We have 4 different treatments: The first one, as a benchmark, corresponds to an ultimatum bargaining game about the last mile cost with environmental costs. In the second one, we deliver a message about environmental impacts of transportation to the buyer, whereas, in the third one, the same message is delivered to the seller. The last one is a control where the message is delivered to both partners. The preliminary results (which included 178 participants) show that the average delivery price proposed by sellers is below Nash equilibrium price but above the "behavioral price" and that acceptance rates of seller's proposals by buyers are quite high.