I did most of the work! Three sources of bias in bargaining with joint production

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 less commonly investigated empirically. Here, we show that overplacement leads to conflict in these situations: individuals overestimate their contribution to the joint production and consequently make unreasonable claims. We further decompose overplacement into three types of cognitive biases: overestimation of one’s own production (i.e. overconfidence bias), underestimation of others’ production (i.e. superiority bias) and biases in information processing. We show that they all contribute to overplacement. To quantify these biases, we develop a novel experimental setting using a psychophysically controlled production task within a bargaining game, where we elicit participants’ subjective estimation of their performance, both before and after they receive information about the joint production. In addition, we test several interventions to mitigate these biases, and successfully decrease disagreements and overplacement through one of them. Our approach illustrates how combining psychophysical methods and economic analyses could prove helpful to identify the impact of cognitive biases on individuals’ behavior.