| By: |
Quentin Cavalan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics);
Vincent Gardelle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics);
Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: |
Although conflicts in bargaining have attracted a lot of attention in the
literature, situations in which bargainers have to share the product of their
performance have been rarely investigated theoretically and empirically. Here,
by decomposing the well-known overplacement effect, we show that two types of
biases can lead to conflict in these situations: players might be
overconfident in their own production (overconfidence bias) and / or
underestimate the production of others (other-underestimation bias). To
quantify these biases, we develop a novel experimental setting using a
psychophysically controlled production task within a bargaining game. In
comparison to Bayesian agents, participants tend to disagree too often, partly
because they exhibit both cognitive biases. We test interventions to mitigate
these biases, and are able to increase settlements mainly by reducing the
other-underestimation bias. Our approach illustrates how combining
psychophysical methods and economic analyses could prove helpful to identify
the impact of cognitive biases on individuals' behavior. |
| Keywords: |
overconfidence,bargaining,joint production,belief updating |
| Date: |
2020–02 |
| URL: |
http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02492289&r=all |