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...

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...

We extend the Baron and Ferejohn (1989) model of multilateral bargaining by allowing the players to attempt commiting to a bargaining position prior to negotiating. If successful, commitment binds a player to reject any proposal which allocates to her a share below a self-imposed threshold. Any...

We study a bilateral negotiation conflict setup where at bargaining impasse the disadvantaged party chooses whether to escalate conflict or not. Escalation is costly for both parties and it results in a random draw of the winner of the escalated conflict. We derive the behavioral predictions of...

We theoretically investigate how the application of unanimity rule can lead to inefficient delay in collective decision making. We do so in the context of a distributive multilateral bargaining model featuring strategic pre-commitment. Prior to each bargaining round, players can declare a...