Performance information, production uncertainty, and subjective entitlements in bargaining

dc.citation.epage2626en_US
dc.citation.issueNumber11en_US
dc.citation.spage2611en_US
dc.citation.volumeNumber61en_US
dc.contributor.authorKaragözoğlu, E.en_US
dc.contributor.authorRiedl, A.en_US
dc.date.accessioned2016-02-08T10:29:24Z
dc.date.available2016-02-08T10:29:24Zen_US
dc.date.issued2015en_US
dc.departmentDepartment of Economicsen_US
dc.description.abstractWe experimentally explore the effect of performance information and production uncertainties on (i) subjective entitlements derived from the production process and (ii) bargaining over the jointly produced surplus. We hypothesize that performance information and details of the production process affect entitlements, which in turn influence bargaining behavior. We find that, without performance information, subjective entitlements are mostly mutually consistent, and bargaining mainly ends with an equal split. In stark contrast, negotiators derive strong, mutually inconsistent, subjective entitlements when there is performance information. These subjective entitlements affect opening proposals, concessions, and bargaining duration and lead to asymmetric agreements. Moreover, given performance information, endogenous variations in entitlements influence bargaining, suggesting an independent role of subjective entitlements. Production uncertainties influence bargaining, especially when performance information is present, but do not substantially mitigate the effect of entitlements. Theoretical bargaining models allowing for reference points or fairness principles can partly account for the empirical results. Yet, important aspects are left unexplained and our results suggest ways for extending these models. © 2015 INFORMS.en_US
dc.identifier.doi10.1287/mnsc.2014.2012en_US
dc.identifier.eissn1526-5501
dc.identifier.issn0025-1909
dc.identifier.urihttp://hdl.handle.net/11693/24436
dc.language.isoEnglishen_US
dc.publisherINFORMSen_US
dc.relation.isversionofhttp://dx.doi.org/10.1287/mnsc.2014.2012en_US
dc.source.titleManagement Scienceen_US
dc.subjectBargainingen_US
dc.subjectExperimentsen_US
dc.subjectNoisy production processen_US
dc.subjectPerformance informationen_US
dc.subjectReference pointsen_US
dc.subjectSubjective entitlementsen_US
dc.subjectExperimentsen_US
dc.subjectBargainingen_US
dc.subjectPerformance informationen_US
dc.subjectProduction processen_US
dc.subjectReference pointsen_US
dc.subjectSubjective entitlementsen_US
dc.subjectManagement scienceen_US
dc.titlePerformance information, production uncertainty, and subjective entitlements in bargainingen_US
dc.typeArticleen_US

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