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Freedom to bargain and disputes’ resolution

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  • Yannick Gabuthy

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  • Eve-Angéline Lambert

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    Abstract

    When two parties are embedded in a dispute, they generally have the possibility to bargain before an external solution is imposed to them, notably through alternative dispute resolution. This bargaining phase may either result from a choice of disputants to negotiate or be imposed by laws or legal contracts. The aim of this paper is to analyze the differences in terms of parties’ bargaining behavior, depending upon the fact that bargaining has been imposed to them or comes from their own will. We conduct an experimental analysis and find out that, under some conditions, a procedure in which parties are forced to bargain leads to more agreements than when parties are free whether to do so. This main result is interpreted in the light of behavioral economics. Copyright Springer Science+Business Media New York 2013

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    Bibliographic Info

    Article provided by Springer in its journal European Journal of Law and Economics.

    Volume (Year): 36 (2013)
    Issue (Month): 2 (October)
    Pages: 373-388

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    Handle: RePEc:kap:ejlwec:v:36:y:2013:i:2:p:373-388

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    Web page: http://www.springerlink.com/link.asp?id=100264

    Related research

    Keywords: Dispute resolution; Behavioral economics; Experimental analysis; C91; D03; K41;

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    1. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
    2. A. Mitchell Polinsky & Daniel L. Rubinfeld, 2003. "Aligning the Interests of Lawyers and Clients," American Law and Economics Review, Oxford University Press, vol. 5(1), pages 165-188.
    3. Smith, Vernon L, 1982. "Microeconomic Systems as an Experimental Science," American Economic Review, American Economic Association, vol. 72(5), pages 923-55, December.
    4. Gertner, Robert H & Miller, Geoffrey P, 1995. "Settlement Escrows," The Journal of Legal Studies, University of Chicago Press, vol. 24(1), pages 87-122, January.
    5. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
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