IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v116y2015icp430-438.html
   My bibliography  Save this article

The pernicious role of asymmetric history in negotiations

Author

Listed:
  • Dezső, Linda
  • Loewenstein, George
  • Steinhart, Jonathan
  • Neszveda, Gábor
  • Szászi, Barnabás

Abstract

The role of history in negotiations is a double-edged sword. Although parties can develop trust over time, there are also countless examples of protracted feuds that developed as a result of conflicting interpretations and invocations of history. We propose that, due to biased invocations of the past, history is likely to play a pernicious role in negotiations – particularly when given an asymmetric history in which one party benefited at the expense of the other. We test this prediction in two, two-stage experiments. We find that asymmetric history in a first stage leads to increased impasses in a second stage, but that this effect holds only when the second stage pairs the same two parties who shared the asymmetric history in the first.

Suggested Citation

  • Dezső, Linda & Loewenstein, George & Steinhart, Jonathan & Neszveda, Gábor & Szászi, Barnabás, 2015. "The pernicious role of asymmetric history in negotiations," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 430-438.
    • Handle: RePEc:eee:jeborg:v:116:y:2015:i:c:p:430-438
    DOI: 10.1016/j.jebo.2015.05.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268115001511
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2015.05.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Haisley, Emily C. & Weber, Roberto A., 2010. "Self-serving interpretations of ambiguity in other-regarding behavior," Games and Economic Behavior, Elsevier, vol. 68(2), pages 614-625, March.
    2. Simon G�chter & Arno Riedl, "undated". "Moral Property Rights in Bargaining," IEW - Working Papers 113, Institute for Empirical Research in Economics - University of Zurich.
    3. John, Leslie K. & Loewenstein, George & Rick, Scott I., 2014. "Cheating more for less: Upward social comparisons motivate the poorly compensated to cheat," Organizational Behavior and Human Decision Processes, Elsevier, vol. 123(2), pages 101-109.
    4. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    5. Loewenstein, George & Issacharoff, Samuel & Camerer, Colin & Babcock, Linda, 1993. "Self-Serving Assessments of Fairness and Pretrial Bargaining," The Journal of Legal Studies, University of Chicago Press, vol. 22(1), pages 135-159, January.
    6. Babcock, Linda, et al, 1995. "Biased Judgments of Fairness in Bargaining," American Economic Review, American Economic Association, vol. 85(5), pages 1337-1343, December.
    7. Charness, Gary, 2000. "Bargaining efficiency and screening: an experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 285-304, July.
    8. Valley, Kathleen & Thompson, Leigh & Gibbons, Robert & Bazerman, Max H., 2002. "How Communication Improves Efficiency in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 38(1), pages 127-155, January.
    9. Alexander W. Cappelen & James Konow & Erik ?. S?rensen & Bertil Tungodden, 2013. "Just Luck: An Experimental Study of Risk-Taking and Fairness," American Economic Review, American Economic Association, vol. 103(4), pages 1398-1413, June.
    10. Greenberg, Jerald, 1993. "Stealing in the Name of Justice: Informational and Interpersonal Moderators of Theft Reactions to Underpayment Inequity," Organizational Behavior and Human Decision Processes, Elsevier, vol. 54(1), pages 81-103, February.
    11. Linda Babcock & Xianghong Wang & George Loewenstein, 1996. "Choosing the Wrong Pond: Social Comparisons in Negotiations That Reflect a Self-Serving Bias," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 1-19.
    12. Sigbjørn Birkeland, 2013. "Negotiation under Possible Third-Party Resolution," Journal of Law and Economics, University of Chicago Press, vol. 56(2), pages 281-299.
    13. Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
    14. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    15. Sigbjørn Birkeland & Bertil Tungodden, 2014. "Fairness motivation in bargaining: a matter of principle," Theory and Decision, Springer, vol. 77(1), pages 125-151, June.
    16. Simon Gächter & Arno Riedl, 2005. "Moral Property Rights in Bargaining with Infeasible Claims," Management Science, INFORMS, vol. 51(2), pages 249-263, February.
    17. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
    18. Weg, Eythan & Rapoport, Amnon & Felsenthal, Dan S., 1990. "Two-person bargaining behavior in fixed discounting factors games with infinite horizon," Games and Economic Behavior, Elsevier, vol. 2(1), pages 76-95, March.
    19. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 67-80, October.
    20. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-372, June.
    21. Roth, Alvin E. & Malouf, Michael W. K. & Murnighan, J. Keith, 1981. "Sociological versus strategic factors in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 2(2), pages 153-177, June.
    22. Dana, Jason & Cain, Daylian M. & Dawes, Robyn M., 2006. "What you don't know won't hurt me: Costly (but quiet) exit in dictator games," Organizational Behavior and Human Decision Processes, Elsevier, vol. 100(2), pages 193-201, July.
    23. Thompson, Leigh & Loewenstein, George, 1992. "Egocentric interpretations of fairness and interpersonal conflict," Organizational Behavior and Human Decision Processes, Elsevier, vol. 51(2), pages 176-197, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emin Karagözoglu & Martin G. Kocher, 2015. "Bargaining under Time Pressure," CESifo Working Paper Series 5685, CESifo.
    2. Alessandro Del Ponte & Aidas Masiliūnas & Noah Lim, 2023. "Information about historical emissions drives the division of climate change mitigation costs," Nature Communications, Nature, vol. 14(1), pages 1-8, December.
    3. Dezső, Linda & Loewenstein, George, 2019. "Self-serving invocations of shared and asymmetric history in negotiations," European Economic Review, Elsevier, vol. 120(C).
    4. Borzino, Natalia & Fatas, Enrique & Peterle, Emmanuel, 2023. "In transparency we trust an experimental study of reputation, transparency, and signaling," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    5. Dezső, Linda & Alm, James & Kirchler, Erich, 2022. "Inequitable wages and tax evasion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dezső, Linda & Loewenstein, George, 2019. "Self-serving invocations of shared and asymmetric history in negotiations," European Economic Review, Elsevier, vol. 120(C).
    2. Emin Karagözoglu & Arno Riedl, 2010. "Information, Uncertainty, and Subjective Entitlements in Bargaining," CESifo Working Paper Series 3133, CESifo.
    3. Elena Cettolin & Arno Riedl, 2017. "Justice Under Uncertainty," Management Science, INFORMS, vol. 63(11), pages 3739-3759, November.
    4. Gantner, Anita & Horn, Kristian & Kerschbamer, Rudolf, 2016. "Fair and efficient division through unanimity bargaining when claims are subjective," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 56-73.
    5. Embrey, Matthew & Hyndman, Kyle & Riedl, Arno, 2021. "Bargaining with a residual claimant: An experimental study," Games and Economic Behavior, Elsevier, vol. 126(C), pages 335-354.
    6. Hennig-Schmidt, Heike & Irlenbusch, Bernd & Rilke, Rainer Michael & Walkowitz, Gari, 2013. "Self-Serving Use of Equity Rules in Bargaining with Asymmetric Outside Options," IZA Discussion Papers 7625, Institute of Labor Economics (IZA).
    7. Sigbjørn Birkeland & Bertil Tungodden, 2014. "Fairness motivation in bargaining: a matter of principle," Theory and Decision, Springer, vol. 77(1), pages 125-151, June.
    8. Wolfgang J. Luhan & Odile Poulsen & Michael W. M. Roos, 2019. "Money or morality: fairness ideals in unstructured bargaining," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(4), pages 655-675, December.
    9. Emin Karagözoğlu & Arno Riedl, 2015. "Performance Information, Production Uncertainty, and Subjective Entitlements in Bargaining," Management Science, INFORMS, vol. 61(11), pages 2611-2626, November.
    10. Dezső, Linda & Loewenstein, George, 2019. "Self-serving invocations of shared and asymmetric history in negotiations," European Economic Review, Elsevier, vol. 120(C).
    11. Asheim, Geir B. & Helland, Leif & Hovi, Jon & Hoyland, Bjorn, 2008. "Self-serving Dictators," Memorandum 26/2008, Oslo University, Department of Economics.
    12. Vanessa Valero, 2022. "Redistribution and beliefs about the source of income inequality," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 876-901, June.
    13. Heinicke, Franziska & König-Kersting, Christian & Schmidt, Robert, 2022. "Injunctive vs. descriptive social norms and reference group dependence," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 199-218.
    14. Ubeda, Paloma, 2014. "The consistency of fairness rules: An experimental study," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 88-100.
    15. Ben Greiner & Werner Güth & Ro’i Zultan, 2012. "Social communication and discrimination: a video experiment," Experimental Economics, Springer;Economic Science Association, vol. 15(3), pages 398-417, September.
    16. Rustichini, Aldo & Villeval, Marie Claire, 2014. "Moral hypocrisy, power and social preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 10-24.
    17. Gantner, Anita & Kerschbamer, Rudolf, 2016. "Fairness and efficiency in a subjective claims problem," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 21-36.
    18. Simon G�chter & Arno Riedl, "undated". "Moral Property Rights in Bargaining," IEW - Working Papers 113, Institute for Empirical Research in Economics - University of Zurich.
    19. Romain Espinosa & Bruno Deffains & Christian Thöni, 2020. "Debiasing preferences over redistribution: an experiment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(4), pages 823-843, December.
    20. Otto, Philipp E. & Bolle, Friedel, 2015. "Exploiting one’s power with a guilty conscience: An experimental investigation of self-serving biases," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 79-89.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:116:y:2015:i:c:p:430-438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.