Causal relationship between conversation length and deal occurrence in mug bargaining

Ascertain the existence, direction, and magnitude of any causal relationship between conversation length and whether a deal occurs in the two-person mug bargaining scenario by designing exogenous variation that identifies how these variables influence each other within the structural causal model framework.

Background

In the mug bargaining simulations, the authors examine conversation length as a downstream outcome relative to exogenously manipulated variables (buyer’s budget, seller’s minimum acceptable price, and seller’s emotional attachment). They show that from randomized experiments, reservation prices significantly affect conversation length.

However, they explicitly note that the causal relationship between conversation length and whether a deal was made cannot be established from the current observational data because neither variable was exogenously varied. Identifying this relationship would require a follow-on experiment that induces exogenous variation in one or both variables.