the intuition that risk exposure is detrimental, we show that residual claimants are able to extract a risk premium, which … is increasing in risk exposure. In some cases the premium is so high that it is advantageous to bargain over a risky pie … rather than a risk-less pie. Contrary to theory, the comparatively less risk adverse residual claimants benefit the most …

payoff to one player is subject to ex-post risk, while the other player receives a fixed payment, effectively making the … player exposed to risk a residual claimant. The ex-post risk not only provides substantive issues for bargaining parties to … resolve in the experiment – i.e. what is a fair compensation for the exposure to risk – it also results in the endogenous …