Bargaining breakdown plagues bargaining in environments with incomplete information. Does communication help or harm? On May 23, 2016, eBay Germany's Best Offer platform introduced unstructured communication allowing desktop users, but not the mobile users, to accompany offers with a message. Using this natural experiment, our difference-in-differences approach documents a 14% decrease in the the rate of breakdown among compliers. Though adoption is immediate, the effect is not. We show, using text analysis, that the dynamics are consistent with repeat players learning how to use communication in bargaining, and that the messaging strategies of experienced sellers are correlated with successful bargaining.

A common complaint about online auctions for consumer goods is the presence of ``snipers,'' who place bids in the final seconds of sequential ascending auctions with predetermined ending times. The literature conjectures that snipers are best-responding to the existence of ``incremental" bidders that bid up to their valuation only as they are outbid. Snipers aim to catch these incremental bidders at a price below their reserve, with no time to respond. As a consequence, these incremental bidders may experience regret when they are outbid at the last moment at a price below their reservation value. We measure the effect of this experience on a new buyer's propensity to participate in future auctions. We show the effect to be causal using a carefully selected subset of auctions from eBay.com and instrumental variables estimation strategy. Bidders respond to sniping quite strongly and are between 4 and 18 percent less likely to return to the platform.