The behavioral literature has demonstrated that the format of supply chain contracts matters even when theoretically it should not and that contracts that in theory coordinate channels fail to do so in laboratory experiments. The existing body of experimental evidence uses an ultimatum...

Field evidence suggests that arbitration increases negotiation dispute rates. We study repeated bargaining in a laboratory to understand the reasons why. Our results represent a reinterpretation of an explanation known as the narcotic effect. The standard interpretation assumes that the...