Strength in Weakness: Yielding and Signaling in Asymmetric Chicken Games

In conflict situations, are those with more to lose more likely to yield? This study investigates competitive behavior through laboratory experiments employing asymmetric chicken games, where participants' endowments represent their potential losses from competition. The experimental design incorporates four information conditions: complete information, private information, voluntary disclosure, and cheap talk. The results reveal that participants with higher endowments are significantly more (less) likely to yield (compete), especially when endowment information is common knowledge. However, when participants have discretion over information disclosure, they strategically underreport their endowments to gain a competitive edge. These findings underscore the pivotal role of information asymmetry and strategic disclosure in shaping conflict dynamics. They also highlight a counterintuitive insight for competitive interactions: signaling weakness, rather than strength, may enhance bargaining power by making threats to compete more credible.