Negotiation under possible third party settlement
AbstractThe effect of possible third party settlement on negotiation behaviour is studied in an economic bargaining experiment. The bargaining phase is preceded by a production phase that allows for different fairness principles to guide the division of the total production value. The experimental results show that a possible third party settlement lowers the dispute costs by reducing the number of rounds of alternating offers. In the presence of a third party, negotiators make first offers that are more strongly related to their production, which reduces the number of rounds of bargaining. The production phase has an effect on the distributional property of the settlements. In negotiations where third party settlement is an option, the negotiation outcome shifts towards a more unequal outcome, more in line with each person's contribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 6/2011.
Length: 34 pages
Date of creation: 15 Nov 2010
Date of revision:
Contact details of provider:
Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 959 277
Fax: 5595 9100
Web page: http://www.nhh.no/sam/
More information through EDIRC
Arbitration; Bargaining effciency; Experiment.;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-14 (All new papers)
- NEP-EXP-2011-05-14 (Experimental Economics)
- NEP-GTH-2011-05-14 (Game Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Konow, James, 1996.
"A positive theory of economic fairness,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 31(1), pages 13-35, October.
- Gary Charness, 1998.
"Bargaining efficiency and screening: An experimental investigation,"
Economics Working Papers
284, Department of Economics and Business, Universitat Pompeu Fabra.
- Charness, Gary, 2000. "Bargaining efficiency and screening: an experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 285-304, July.
- Charness, Gary B, 1998. "Bargaining Efficiency And Screening: An Experimental Investigation," University of California at Santa Barbara, Economics Working Paper Series qt86r0x2tf, Department of Economics, UC Santa Barbara.
- Simon Gächter & Arno Riedl, 2005.
"Moral Property Rights in Bargaining with Infeasible Claims,"
INFORMS, vol. 51(2), pages 249-263, February.
- Simon G�chter & Arno Riedl, 2003. "Moral Property Rights in Bargaining with Infeasible Claims," Tinbergen Institute Discussion Papers 03-055/1, Tinbergen Institute.
- Simon G�chter & Arno Riedl, 2004.
"Dividing justly in Bargaining Problems with Claims,"
Tinbergen Institute Discussion Papers
04-044/1, Tinbergen Institute.
- Simon Gächter & Arno Riedl, 2006. "Dividing Justly in Bargaining Problems with Claims," Social Choice and Welfare, Springer, vol. 27(3), pages 571-594, December.
- Alexander W. Cappelen & Astri D. Hole & Erik Ø. Sørensen & Bertil Tungodden, 2005.
"The Pluralism of Fairness Ideals: An Experimental Approach,"
CESifo Working Paper Series
1611, CESifo Group Munich.
- Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
- James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
- Bolton, Gary E. & Katok, Elena, 1998. "Reinterpreting Arbitration's Narcotic Effect: An Experimental Study of Learning in Repeated Bargaining," Games and Economic Behavior, Elsevier, vol. 25(1), pages 1-33, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dagny Hanne Kristiansen).
If references are entirely missing, you can add them using this form.