Kimbrough, Erik O.; Sheremeta, Roman M. - In: International Journal of Industrial Organization 31 (2013) 3, pp. 278-286
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 reduce conflicts …