Self-Serving Biases in Bargaining

Kohnz, Simone (März 2006): Self-Serving Biases in Bargaining. Explaining Impasse. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2006-9

Abstract

There is strong evidence that in bargaining situations with asymmetric outside options people exhibit self-serving biases concerning their fairness judgements. Moreover, psychological literature suggests that this can be a driving force of bargaining impasse. This paper extends the notion of inequity aversion to incorporate self-serving biases due to asymmetric outside options and analyses whether this leads to bargaining breakdown. I distinguish between sophisticated and naive agents, that is, those agents who understand their bias and those who do not. I find that breakdown in ultimatum bargaining results from naiveté of the proposers.

• Dokumententyp: Paper
• Keywords: fairness perceptions, self-serving bias, inequity aversion, ultimatum bargaining, outside options
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Munich Discussion Papers in Economics ; Volkswirtschaft > Munich Discussion Papers in Economics > Verhaltenswissenschaftliche Ökonomik
• Themengebiete: 300 Sozialwissenschaften > 300 Sozialwissenschaft, Soziologie ; 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: A13, C7, D63
• Sprache: Englisch