Two players with preferences distorted by the focusing effect (Koszegi and Szeidl, 2013) negotiate an agreement over several issues and one transfer. We show that, as long as their preferences are differentially distorted, an issue will be inefficiently left out of the agreement or inefficiently...

For many years now, lack of progress in multilateral trade negotiations has been a major cause of concern among WTO members. With diversity in the economic situation of members and differences in their stages of development, delay in concluding trade agreements is inevitable. However, the...

Wage transparency regulation is widely considered and adopted as a tool to reduce the gender wage gap. We combine field and laboratory evidence to address how and when wage transparency can be effective and explore the role of belief adjustments as a mechanism. In the field, this paper studies a...

This paper investigates the issue of strategic delegation by considering the role of management centrality in contracting with different stakeholders. Specifically, a sequential negotiation unionized duopoly model is analysed, in which the management relative bargaining power visà-vis...

The rise of a new power may lead the dominant power to seek a preventive war. We study this scenario in an experimental two-stage bargaining game. In each stage, the rising power makes a bargaining offer and the declining power must choose whether to accept it or fight. Between the two stages,...

This paper analyzes vertical integration incentives in a bilaterally duopolistic industry where input market outcomes are determined by bargaining. Vertical integration incentives are a combination of horizontal integration incentives up- and downstream and depend on the strength of...

Delegating bargaining to an intermediary agent is common practice in many situations. The proposer, while not actively bargaining, sets constraints on the intermediary agent's offer. We study ultimatum games where proposers delegate bargaining to an intermediary agent by setting boundaries on...

In this paper, we study how the emergence of Uber in a large North American city affects the financial value of taxicab licenses. A taxicab license provides a claim to a stream of dividends in the form of rents generated by operating the taxicab or leasing the license. The introduction of Uber...

In many bargaining situations, the distribution of seats or voting weights does not accurately reflect bargaining power. Maaser, Paetzel and Traub (Games and Economic Behavior, 2019) conducted an experiment to investigate the effect of such nominal power differences in the classic Baron-Ferejohn...

We model mortgage refinancing as a bargaining game involving the borrowing household, the incumbent lender, and an outside bank. In equilibrium, the borrower's ability to refinance depends both on the competitiveness of the local banking market and on the cost of switching banks. We find...

Previous scholars have noted the increase in negotiated agreements as a means of resolving utility regulatory disputes in the United States. These agreements allow policy actors to make their own decisions instead of receiving orders from a regulatory agency. Through a natural gas utility case...

This paper studies trade in endogenously evolving markets exhibiting few traders at any given point in time. Traders arrive in the market and bargain until they complete a trade. We find that, unlike large markets, small markets feature trade delay and price dispersion, even when sellers and...

The future of the Yemen conflict will be decided about 120 kilometres east of the capital Sanaa, in the city of Marib. So far, the internationally recognised Yemeni gov­ernment, supported by Saudi Arabia, has been able to ward off a two-year offensive from the Houthi movement, which originates...

Wage transparency regulation is widely considered and adopted as a tool to reduce the gender wage gap. We combine field and laboratory evidence to address how and when wage transparency can be effective and explore the role of belief adjustments as a mechanism. In the field, this paper studies a...

Purpose Based on Behavioral Theory of Negotiations (Walton & McKersie, 1965), the purpose of this paper is to discuss the existing gap between negotiation theory and pedagogy and presents an experiential teaching tool that closes this gap. The tool is a 'serious game' (Abt, 1975) that reinforces...

This paper analyzes a common-value, first-price auction with state-dependent participation. The number of bidders, which is unobservable to them, depends on the true value. For participation patterns with many bidders in each state, the bidding equilibrium may be of a "pooling" type - with high...

I revisit the Rubinstein (1982) model for the classic problem of price haggling and show that bargaining can become a "trap," where equilibrium leaves one party strictly worse off than if no transaction took place (e.g., the equilibrium price exceeds a buyer's valuation). This arises when one...

It is important for developing host countries to ensure that the investment contracts they enter into with foreign investors are fit-for-purpose and effectively protect the parties’ often competing commercial interests. To ensure that these contracts are fair and equitable, host countries may...

This paper analyses collusion by innovative firms and the role of patents in a continuous-time real options framework. A patent-investment race model is formulated in which innovative firms bargain and reach collusive agreements. It is shown that, while collusion always delays innovation, it...

The worrying trajectory of US economic strength relative to China signals a need to reassess the US’ rules of engagement on trade and investment with our principal economic rival. China is turning more authoritarian, more focused on self-sufficiency, challenging US dominance in critical...

In a bargaining paradigm, we investigated the influence of reputational concern and monetary gain on generosity and deception. 141 schoolchildren aged between 7 to 12 participated in an ultimatum bargaining game. As proposers, they were asked to split a monetary resource with a hypothetical...