We exploit a controlled frameless laboratory experiment to study settlement negotiations and the plaintiff's decision … (Ashenfelter et al. 1992) that greater risk in arbitration outcomes increases the settlement rate. We find that self-serving biases … that of the defendant induces the plaintiffs to excessive risk-taking in an attempt to narrow the gap. -- bargaining …

We analyze the optimal choice of risk in a two-stage tournament game between two players that have different concave … utility functions. At the first stage, both players simultaneously choose risk. At the second stage, both observe overall risk … and simultaneously decide on effort or investment. The results show that those two effects which mainly determine risk …