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Fairness in Delegated Bargaining

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  • Frauke Lammers
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    Abstract

    "This article examines whether a principal prefers to hire a fair or a selfish agent. A fair agent cares to some extent for the well-being of other people and thus he also cares for the principal. Therefore, if the agent performs individual work, the principal is always better off to hire a fair agent. However, we show that when a third party with conflicting interests is introduced, it may be advantageous for the principal to hire a selfish agent. The reason is that the selfish agent will be a tough bargainer not only when negotiating his employment contract with the principal but also when dealing with the third party, for example, when selling the principal's product to a buyer." Copyright (c) 2010, The Author(s) Journal Compilation (c) 2010 Wiley Periodicals, Inc..

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

    Volume (Year): 19 (2010)
    Issue (Month): 1 (03)
    Pages: 169-183

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    Handle: RePEc:bla:jemstr:v:19:y:2010:i:1:p:169-183

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