Biased judgments of fairness in bargaining
The likelihood of impasses occurring in the legal system and in contract negotiations is hypothesized to be influenced by the systematically biased manner by which both parties expect adjudicated settlements. This behavior is posited to be present even when both parties are presented with the same information, thereby creating a scenario where they have different conclusions about what a fair settlement would be.
Publication Name: American Economic Review
Explaining bargaining impasse: the role of self-serving biases
Economists have blamed incomplete information as a major factor behind delays in negotiations or settlements. Bargaining parties are uncertain about the reservation value of the other side due to the existence of self-serving bias. This bias is examined using a tort case based on a trial in Texas. Results show the importance of psychological data in analyzing the behavior of subjects.
Publication Name: Journal of Economic Perspectives
The relationship between uncertainty, the contract zone, and efficiency in a bargaining experiment
No research on bargaining which studies the effects of contract zone and information has been conducted. An experiment on bargaining was done which manipulated the size of the surplus and the opponent's uncertainty. It was found that bargaining efficiency is diminished by uncertainty. The presence of certainty or uncertainty determines the effect of contract zone.
Publication Name: Journal of Economic Behavior & Organization
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