Projects funded in Europe

Causes of Bargaining Failure

Researcher(s):
Nagore Iriberri
Period:
from 2016 to 2022
Financing entity:
Norwegian Business School
Total amount:
750.000 kronar noruego (aprox. 64.000 euros)
Description:

The workhorse model of bargaining in economics and political science assume rational agents and complete and perfect information. This model is unable to account for delay or breakdown in bargaining. An emerging theoretical literature explore behavioral causes of bargaining failure, such as biased beliefs, commitments, and lack of common knowledge rationality. In this project, we are formulating models and performing a systematic evaluation of competing hypotheses in controlled experiments. We address bilateral bargaining, and we focus on three causes of bargaining failure: biased beliefs; commitment; and lack of common knowledge rationality.