EconPapers    
Economics at your fingertips  
 

Overestimate yourself or underestimate others? Two sources of bias in bargaining with joint production

Quentin Cavalan (), Vincent de Gardelle and Jean-Christophe Vergnaud ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

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 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-neu
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-02492289
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Published in 2020

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-02492289/document (application/pdf)

Related works:
Working Paper: Overestimate yourself or underestimate others? Two sources of bias in bargaining with joint production (2020) Downloads
Working Paper: Overestimate yourself or underestimate others? Two sources of bias in bargaining with joint production (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-02492289

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2021-07-25
Handle: RePEc:hal:cesptp:halshs-02492289