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Explaining Bargaining Impasse: The Role of Self-Serving Biases

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  • Linda Babcock
  • George Loewenstein

Abstract

The authors review studies conducted by themselves and coauthors that document a 'self-serving' bias in judgments of fairness and demonstrate that the bias is an important cause of impasse in negotiations. They discuss experimental evidence showing that (1) the bias causes impasse; (2) it is possible to reduce impasses by debiasing bargainers; and (3) the bias results from selective evaluation of information. The authors also review results from a field study of negotiations between teachers' unions and school boards in Pennsylvania that both document the fairness bias in a naturalistic setting and demonstrates its impact on strikes.

Suggested Citation

  • Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
    • Handle: RePEc:aea:jecper:v:11:y:1997:i:1:p:109-26
    Note: DOI: 10.1257/jep.11.1.109
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.11.1.109
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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