Kimbrough, Erik O.; Sheremeta, Roman M. - Economic Science Institute (ESI), Argyros School of … - 2012
the dispute before it occurs. The equilibrium of a conflict game with side-payments predicts that with binding offers …, proposers make and responders accept side-payments, generating settlements that strongly favor proposers. When side-payments are … non-binding, proposers offer nothing and conflicts always arise. Laboratory experiments confirm that binding side-payments …