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Time-varying fairness concerns, delay, and disagreement in bargaining

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  • Karagözoğlu, Emin
  • Keskin, Kerim

Abstract

We study an alternating-offers, bilateral bargaining game where players may derive disutility from accepting shares below what they deem as fair. Moreover, we assume that the values they attach to fairness (i.e., their sensitivity to violations of their fairness judgments) decrease over time, as the deadline approaches. Our results offer a new explanation to delays and disagreements in dynamic negotiations. We show that even mutually compatible fairness judgments do not guarantee an immediate agreement. We partially characterize conditions for delay and disagreement, and study the changes in the length of delay in response to changes in the model parameters.

Suggested Citation

  • Karagözoğlu, Emin & Keskin, Kerim, 2018. "Time-varying fairness concerns, delay, and disagreement in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 147(C), pages 115-128.
  • Handle: RePEc:eee:jeborg:v:147:y:2018:i:c:p:115-128
    DOI: 10.1016/j.jebo.2018.01.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Bargaining; Deadline effect; Delay; Disagreement; Fairness concerns; Justice sensitivity;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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