Self-Serving Biases in Bargaining. Explaining Impasse

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2006-9

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Social Values ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement
• Subject: fairness perceptions ; self-serving bias ; inequity aversion ; ultimatum bargaining ; outside options

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kohnz, Simone
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2006

Further information

• DOI: doi:10.5282/ubm/epub.899
• Handle: http://hdl.handle.net/10419/104206
• URN: urn:nbn:de:bvb:19-epub-899-2
• Last update: 10.03.2025, 11:45 AM CET