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Author Karagözoğlu, Emin ♦ Riedl, Arno
Source EconStor
Content type Text
Publisher Institute for the Study of Labor (IZA)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword bargaining ♦ performance information ♦ randomness in production process ♦ entitlements ♦ experiments ♦ Game Theory and Bargaining Theory: Other ♦ Design of Experiments: Laboratory, Group Behavior ♦ Microeconomic Behavior: Underlying Principles ♦ Production and Organizations: Other ♦ Equity, Justice, Inequality, and Other Normative Criteria and Measurement ♦ Information and Uncertainty: Other ♦ Personnel Economics: Other
Abstract More often than not production processes are the joint endeavor of people having different abilities and productivities. Such production processes and the associated surplus production are often not fully transparent in the sense that the relative contributions of involved agents are blurred; either by lack of information about the actual performance of collaborators or because of random noise in the production process or both. These variables likely influence the surplus sharing negotiations following the production. By means of a laboratory experiment, we systematically investigate their role for the whole bargaining process from opening offers to (dis)agreements and find that uncertainties in surplus production and (even) a very coarse performance information lead to bargaining asymmetries. In addition, we find that bargainers' subjective entitlements are also influenced by performance information and the randomness inherent in the production process. These differences in subjective entitlements together with the differences in entitlements between better and worse performers influence the whole bargaining process and significantly contribute to the differences in bargaining outcomes.
Part of series IZA Discussion Papers x5079
Learning Resource Type Article
Publisher Date 2010-01-01
Publisher Place Bonn
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