Information, uncertainty, and subjective entitlements in bargaining

Arbeitspapier

More often than not production processes are the joint endeavor of people having different abilities and productivities. Such production processes and the associated surplus production are often not fully transparent in the sense that the relative contributions of involved agents are blurred; either by lack of information about the actual performance of collaborators or because of random noise in the production process or both. These variables likely influence the surplus sharing negotiations following the production. By means of a laboratory experiment, we systematically investigate their role for the whole bargaining process from opening offers to (dis)agreements and find that uncertainties in surplus production and (even) a very coarse performance information lead to bargaining asymmetries. In addition, we find that bargainers' subjective entitlements are also influenced by performance information and the randomness inherent in the production process. These differences in subjective entitlements together with the differences in entitlements between better and worse performers influence the whole bargaining process and significantly contribute to the differences in bargaining outcomes.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3133

Classification and Topics

• Classification: Wirtschaft ; Game Theory and Bargaining Theory: Other ; Design of Experiments: Laboratory, Group Behavior ; Microeconomic Behavior: Underlying Principles ; Production and Organizations: Other ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Information and Uncertainty: Other ; Personnel Economics: Other
• Subject: bargaining ; performance information ; randomness in production process ; entitlements ; experiments ; Verhandlungstheorie ; Personalbeurteilung ; Asymmetrische Information ; Sportökonomik ; Risiko ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Karagözoğlu, Emin ; Riedl, Arno
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/38943
• Last update: 10.03.2025, 11:44 AM CET