Although many real bargaining situations involve more than two people, much of the theoretical and experimental research concentrates on the two player situation. We study the simplest possible extension: four people (two two-person groups) of different patience bargain with each other....

We exploit a controlled frameless laboratory experiment to study settlement negotiations and the plaintiff's decision to raise a lawsuit in case of an impasse. We find that greater variance in court outcomes increases the litigation rate and lowers the settlement rate. This latter finding goes...

During the last three decades the ascent of behavioral economics clearly helped to bring down artificial disciplinary boundaries between psychology and economics. Noting that behavioral economics seems still under the spell of the rational choice tradition and, indirectly, of behaviorism we...

Many real-life applications of house allocation problems are dynamic. For example, in the case of on-campus housing for college students, each year freshmen apply to move in and graduating seniors leave. Each student stays on campus for a few years only. A student is a "newcomer" in the...

Most research in economics models agents somehow motivated by outcomes. Here, we model agents motivated by procedures instead, where procedures are defined independently of an outcome. To that end, we design procedures which yield the same expected outcomes or carry the same information on...

In reality, it is often groups rather than individuals that make decisions. In previous experiments, groups have frequently been shown to act differently from individuals in several ways. It has been claimed that inter-group interactions may be (1) more competitive, (2) more rational, or (3)...

Bargaining is prevalent in economic interactions. Under complete information, game theory predicts efficient bargaining outcomes (immediate acceptance of first offer) (see Rubinstein, 1982). However, continuous rejections of offers leading to inefficient delays (escalation) have regularly been...

Concessions try to avoid conflict in bargaining and can finally lead to an agreement. Although they usually are seen as unfolding in time, concessions can also be studied in normal form or by conditioning only on failure of earlier agreement attempts. We experimentally compare three protocols of...

In line with the widely applied principle of just deserts, we assume that the severity of the penalty on a contract offender increases in the harm on the other. When this principle holds, the influence of the efficiency of the agreement on the incentives to abide by it crucially depends on...

We investigated the dependence of threat perception and reaction on social distance estimation. Social identity threat was imposed within a 2x2 between subjects design, with N=163 students reading a criticising comment about their ingroup assigned to originate from one of two possible outgroups....