ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES

Optimal placement of renewable distributed generators and electric vehicles using multi-population evolution whale optimization algorithm
Zangmo R, Sudabattula SK, Mishra S, Dharavat N, Golla NK, Sharma NK and Jadoun VK
This research takes on a crucial task- exploring the optimal placement of Renewable Distributed Generators such as Solar Photovoltaic, wind turbines and Electric Vehicles into the Radial Distribution System (RDS). This is a strategic move aimed at minimising power loss (P) and improving the voltage profile and stability index. The RDGs are integrated into RDS with and without considering the uncertainty of the different load demands for 24 h. The probability function of Beta and Weibull distribution functions are employed to attain the solar irradiance and wind speed in a particular region. In addition, EVs are also integrated into RDS, employing meta-heuristic algorithms intended to reduce power loss (PLoss) and improve the voltage profile. The study uses an Indian 28-bus test system mimicking a balanced radial distribution network to integrate distributed generators (DGs) and EV charging stations. The simulated results demonstrate that integrating DGs into power systems has offered considerable benefits, including reduced PLoss, heightened efficiency, decreased dependency on centralised generation, and improved environmental sustainability. It is discovered that the Multi-population Evolution Whale Optimization Algorithm (MEWOA) produces better results than other methods in the literature and is valuable and practical for handling these nonlinear optimisation situations.
Using Fresh Starts to Nudge Increased Retirement Savings
Beshears J, Dai H, Milkman KL and Benartzi S
We conducted a field experiment to study the effect of framing future moments in time as new beginnings (or "fresh starts"). University employees (N=6,082) received mailings with an opportunity to choose between increasing their contributions to a savings plan immediately or at a specified future time point. Framing the future time point in relation to a fresh start date (e.g., the recipient's birthday, the first day of spring) increased the likelihood that the mailing recipient chose to increase contributions at that future time point without decreasing their likelihood of increasing contributions immediately. Overall, fresh start framing increased retirement plan contributions in the eight months following the mailing. Our findings represent the first experimental demonstration of the benefits of fresh start framing in a consequential field setting.
Active choice, implicit defaults, and the incentive to choose
Beshears J, Choi JJ, Laibson D and Madrian BC
Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy pick-up a requirement for insurance eligibility. The program introduces an implicit default for those who don't make an active choice: pharmacy pick-up insurance subsidies. Under this program, 42% of eligible employees actively choose home delivery, 39% actively choose pharmacy pick-up, and 19% make no active choice and are assigned the implicit default. Individuals who financially benefit most from home delivery are more likely to choose it. Those who benefit least from insurance subsidies are more likely to make no active choice and lose those subsidies. The implicit default incentivizes people to make an active choice, thereby playing a key role in choice architecture.
Face threat sensitivity in distributive negotiations: Effects on negotiator self-esteem and demands
Tuncel E, Kong DT, McLean Parks J and van Kleef GA
Face threat sensitivity (FTS) is defined as reactive sensitivity to threats to one's social self-worth. In negotiations, such threats may come from a counterpart's competitive behavior. We developed and tested the argument that individuals high in face threat sensitivity, when negotiating with a competitive (vs. cooperative) counterpart, exhibit psychological responses that inhibit them from claiming value in distributive negotiations. Employing a face-to-face interaction paradigm, Study 1 revealed that higher counterpart competitiveness was negatively associated with high (but not low) FTS negotiators' global self-esteem, which in turn led them to be less demanding and obtain worse negotiation outcomes. In Study 2, employing a simulated on-line interaction paradigm, we manipulated counterpart's behavior (cooperative vs. competitive) to establish causality and examined specific aspects of negotiator global self-esteem that may account for the effect. We found that the effect of counterpart's competitiveness on high FTS negotiators' demand levels was mediated by their self-esteem, but not by their self-esteem. In Study 3, we manipulated performance self-esteem to establish it as a causal underlying psychological mechanism. For high FTS negotiators, when performance self-esteem was low, demand levels were significantly lower with a competitive (vs. cooperative) counterpart. However, when performance self-esteem was high, there was no significant difference in demand levels depending on counterpart's behavior. This finding suggests that negotiating with a competitive (vs. cooperative) counterpart reduces high FTS negotiators' performance self-esteem, which in turn leads them to make lower demands. The implications of these findings are discussed.
Nudging: Progress to date and future directions
Beshears J and Kosowsky H
Nudges influence behavior by changing the environment in which decisions are made, without restricting the menu of options and without altering financial incentives. This paper assesses past empirical research on nudging and provides recommendations for future work in this area by discussing examples of successful and unsuccessful nudges and by analyzing 174 articles that estimate nudge treatment effects. Researchers in disciplines spanning the behavioral sciences, using varied data sources, have documented that many different types of nudges succeed in changing behavior in a wide range of domains. Nudges that automate some aspect of the decision-making process have an average effect size, measured by Cohen's , that is 0.193 larger than that of other nudges. Our analyses point to the need for future research to pay greater attention to (1) determining which types of nudges tend to be most impactful; (2) using field and laboratory research approaches as complementary methods; (3) measuring long-run effects of nudges; (4) considering effects of nudges on non-targeted outcomes; and (5) examining interaction effects among nudges and other interventions.
Behavior Change
Duckworth AL and Gross JJ
Despite rapid growth in the empirical research on behavior change, modern science has yet to produce a coherent set of recommendations for individuals and organizations eager to align everyday actions with enduringly valued goals. We propose the as a parsimonious framework for organizing strategies according to where they have their primary impact in the generation of behavioral impulses. To begin, individuals exist in objective situations, only certain features of which attract attention, which in turn lead to subjective appraisals, then finally give rise to response tendencies. Unhealthy habits develop when conflicting impulses are consistently resolved in favor of momentary temptations instead of valued goals. To change behavior for the better, we can strategically modify objective , where we pay , how we construct , and how we enact . Crucially, behavior change strategies can be initiated either by the individual (i.e., self-control) or by others (e.g., a benevolent employer).
Editorial: Where we are, how we got here, and where we're going
Kouchaki M
What's next for nudging and choice architecture?
Thaler R
Culture and decision making
Yates JF and de Oliveira S
The study of culture and decision making addresses variations in how and why people from different cultures sometimes tend to decide differently. This review is organized around what is intended to be a comprehensive analysis of the distinct fundamental questions that people must answer in the process of making virtually all real-life decisions. Our emphasis was on recent developments as well as identifying important yet neglected topics (e.g., how decision episodes get started-or not, and why some decisions are never implemented). Early as well as current efforts have focused mainly on East Asian and North American Caucasian cultures, with little treatment of other populations. In such studies, individualism and collectivism have been the dominant explanatory factors although related but distinct concepts such as "tightness" and "looseness" have been welcome additions to recent discussions. Throughout, the review emphasizes practical concerns, such as the challenges of intercultural learning and collaboration.
People Believe That They Are Prototypically Good or Bad
Roy MM, Liersch MJ and Broomell S
People have been shown to view their beliefs as being prototypical (modal) but their abilities as (falsely) unique (above or below average). It is possible that these two viewpoints - self as prototypical and self as unique - can be reconciled. If the distribution of ability for a given skill is skewed such that many others have high (low) ability and few others have low (high) ability, it is possible that a majority of peoples' self-assessments can be above (below) average. Participants in 5 studies demonstrated an understanding that various skills have skewed ability distributions and their self-assessments were related to distribution shape: high when negatively skewed and low when positively skewed. Further, participants tended to place themselves near the mode of their perceived skill distribution. Participants were most likely to think that they were good at skills for which they thought that most others were also good.
Decision making under time pressure, modeled in a prospect theory framework
Young DL, Goodie AS, Hall DB and Wu E
The current research examines the effects of time pressure on decision behavior based on a prospect theory framework. In Experiments 1 and 2, participants estimated certainty equivalents for binary gains-only bets in the presence or absence of time pressure. In Experiment 3, participants assessed comparable bets that were framed as losses. Data were modeled to establish psychological mechanisms underlying decision behavior. In Experiments 1 and 2, time pressure led to increased risk attractiveness, but no significant differences emerged in either probability discriminability or outcome utility. In Experiment 3, time pressure reduced probability discriminability, which was coupled with severe risk-seeking behavior for both conditions in the domain of losses. No significant effects of control over outcomes were observed. Results provide qualified support for theories that suggest increased risk-seeking for gains under time pressure.
Explaining the Variable Effects of Social Support on Work-Based Stressor-Strain Relations: The Role of Perceived Pattern of Support Exchange
Nahum-Shani I and Bamberger PA
Seeking to explain mixed empirical findings regarding the buffering effect of social support on work-based stress-strain relations, we posit that whether an increase in the level of support received buffers or exacerbates the harmful effects of workload on employee health and well-being is contingent upon the general pattern characterizing an employee supportive exchanges across his/her close relationships. Specifically, we propose that the buffering effect of receiving social support depends on whether the employee perceives his/her social exchanges as reciprocal (support given equals support received), under-reciprocating (support given exceeds support received), or over-reciprocating (support received exceeds support given). Based on longitudinal data collected from a random sample of blue-collar workers, our findings support our predictions, indicating that the buffering effect of social support on the relationship between work hours (on the one hand) and employee health and well-being (on the other) varies as a function of the pattern of exchange relations between an employee and his/her close support providers.
Why the Unskilled Are Unaware: Further Explorations of (Absent) Self-Insight Among the Incompetent
Ehrlinger J, Johnson K, Banner M, Dunning D and Kruger J
People are typically overly optimistic when evaluating the quality of their performance on social and intellectual tasks. In particular, poor performers grossly overestimate their performances because their incompetence deprives them of the skills needed to recognize their deficits. Five studies demonstrated that poor performers lack insight into their shortcomings even in real world settings and when given incentives to be accurate. An additional meta-analysis showed that it was lack of insight into their own errors (and not mistaken assessments of their peers) that led to overly optimistic estimates among poor performers. Along the way, these studies ruled out recent alternative accounts that have been proposed to explain why poor performers hold such positive impressions of their performance.
Domain-based asymmetry in expectations of the future
Monga A and Rao AR
We examine how prior outcomes can influence expectations about unrelated future events. Consistent with the affect literature, we first predict that prior outcomes will yield more optimistic expectations when the outcomes are positively, rather than negatively, valenced. We then predict that the impact of prior outcomes will depend on not only the valence, but also the domain of prior outcomes. Specifically, we draw from Prospect theory to predict that the impact of prior outcomes on future expectations will be greater in the domain of losses than in the domain of gains. Two lottery-based experiments demonstrate that this effect is robust across different starting and ending wealth states, and a third experiment shows that these differences in expectations also translate into differences in risk preferences.
Predicting Affective Responses to Unexpected Outcomes
Coughlan R and Connolly T
In decisions under uncertainty, decision makers confront two uncertainties: the uncertain linkage between actions and outcomes and the uncertain linkage between these outcomes and his or her affective responses to them. The two studies reported here examine affective responses to expected and unexpected outcomes in various settings. In Study 1, a scenario-based laboratory experiment (N = 149), we examined subjects' predicted responses to a range of outcomes, as a function of how surprising the outcome was. Study 2, a field study (N = 127), involved the expectations of bowlers about their scores in an upcoming game and about their responses to various outcomes at, above, and below expectations. We also measured actual affective reactions after the bowlers had completed their games. Findings suggest that subjects both expect and experience a loss-averse, expectation-based value function broadly of the Prospect Theory type. They also anticipate, and experience, an amplifying effect of outcome surprise, though they underestimate its size. We argue that such underestimation, together with overtight prediction ranges, may expose subjects to much larger affective variation with outcome variability than they anticipate. Copyright 2001 Academic Press.
Does Time Constraint on Users Negate the Efficacy of Decision Support Systems?
Chu PC and Spires EE
Time constraint can impair decision performance: time-constrained decision makers process information faster, process less information, and use less rigorous decision strategies. On the other hand, properly designed decision support systems (DSSs) can induce decision makers to process more information and use more rigorous decision strategies, which can result in enhanced performance. In this study, we investigate, drawing on bounded rationality and cost-benefit theories of DSS use, whether these salutary effects of DSSs still hold in time-constrained environments. Our experimental results replicate past research regarding the effects of time constraint and DSSs taken separately and also show that the positive effects of DSSs are maintained when decision makers are under time constraint. That is, consistent with hypotheses, time-constrained participants processed information in a more compensatorylike manner when aided by DSSs than when not. Some of the results suggest that the negative effects of time constraint can be mitigated or even eliminated by the use of DSSs, but some participants did not take full advantage of the DSS to combat time constraint. Copyright 2001 Academic Press.
The Disjunction Effect: Does It Exist for Two-Step Gambles?
Kühberger A, Komunska D and Perner J
One of the basic axioms of the rational theory of decision under uncertainty is Savage's (1954) Sure Thing Principle. It states that if Prospect x is preferred to Prospect y knowing that Event A occurred, and if x is preferred to y knowing that A did not occur, then x should also be preferred to y when it is not known whether A occurred. Tversky and Shafir (1992) claim to have demonstrated a violation of this principle in two-step gambles, which is termed a disjunction effect. The present article evaluates the replicability of the disjunction effect for two-step gambles. The findings show that people do not violate the sure thing principle in repeated gambles. The validity of alleged violations in other paradigms is discussed. Copyright 2001 Academic Press.
Calibration of Subjective Probability Judgments in a Naturalistic Setting
Johnson JE and Bruce AC
Results of previous calibration studies are used to identify features of the decision maker and the decision environment which might be expected to result in good calibration. Racetrack bettors and, in particular, the UK parimutuel betting market are identified as possessing such characteristics. In order to explore calibration in this setting, an analysis is undertaken of bets placed on 19,396 horses. A close correlation is observed between the subjective probability judgments of horses' success, implicit in the bettors' wagering activities, and the objective probability of success of the horses concerned. Explanations for the results are offered in terms of characteristics of racetrack bettors and the naturalistic setting, with particular reference to the operation of the betting market. The results contribute to an emergent school of thought which advocates naturalistic enquiry as a complement to laboratory-based experiments in further developing the understanding of decision making. Copyright 2001 Academic Press.
Do Conditional Hypotheses Target Rare Events?
McKenzie CR, Ferreira VS, Mikkelsen LA, McDermott KJ and Skrable RP
When testing hypotheses, rare or unexpected observations are normatively more informative than common observations, and recent studies have shown that participants' behavior reflects this principle. Research has also shown that, when asked to test conditional hypotheses ("If X, then Y") that are abstract or unfamiliar, participants overwhelmingly consider a supporting observation mentioned in the hypothesis (X&Y) to be more informative than a supporting observation not mentioned ( approximately X approximately Y). These two empirical findings would mesh well if conditional hypotheses tend to be phrased in terms of rare, rather than common, events. Six experiments are reported indicating that people do have a tendency-often a very strong one-to phrase conditional hypotheses in terms of rare events. Thus, observations mentioned in conditional hypotheses might generally be considered highly informative because they usually are highly informative. Copyright 2001 Academic Press.
Cognitive Diversity and Consensus in Group Decision Making: The Role of Inputs, Processes, and Outcomes
Mohammed S and Ringseis E
This study contributes to the new and growing body of research on shared cognition by examining how individuals entering a group decision-making context with different perspectives of the issues to be discussed arrive at cognitive consensus. Cognitive consensus refers to similarity among group members regarding how key matters are conceptualized and was operationalized as shared assumptions underlying decision issues in the present research. Utilizing 37 student groups participating in a multi-issue decision-making exercise, the study investigated antecedents and correlates of cognitive consensus. Results revealed that unanimity decision rule groups achieved more cognitive consensus than majority rule groups. In addition, group members inquiring concerning the reasons underlying others' decision preferences, accepting others' viewpoints as legitimate, and incorporating others' perspectives into their own interpretations of the issues was positively related to arriving at a greater degree of cognitive consensus. Cognitive consensus also positively influenced expectations regarding decision implementation and satisfaction. Copyright 2001 Academic Press.
Content Effects on Decision Making
Rettinger DA and Hastie R
How does the domain or subject matter of a decision problem affect the outcome of the decision? Although decision-making research typically dismisses content as merely a cover story, the present research shows that it plays a fundamental role in the decision process by influencing the information processing that underlies it. An experiment is reported in which the same basic decision problem was presented in several content domains (legal traffic tickets, academic course grades, stock investments, and casino gambling). The changes in content led to changes in both strategies and mental representations, which in turn led to changes in decision outcomes, even though measures of the subjective utilities of the options remained unchanged. Copyright 2001 Academic Press.
Primacy Effects in Justice Judgments: Testing Predictions from Fairness Heuristic Theory
Lind EA, Kray L and Thompson L
We tested predictions from fairness heuristic theory that justice judgments are more sensitive to early fairness-relevant information than to later fairness-relevant information and that this primacy effect is more evident when group identification is higher. Participants working on a series of three tasks experienced resource failures that interfered with their productivity and always had the possibility of explaining problems to a supervisor. In a manipulation of the timing of fairness-relevant experiences, the supervisor refused to consider explanations on the first, second, or third of three work trials (but did consider explanations on the other two trials) or the supervisor never refused to hear the explanations. Prior to the work periods, the participants either had or had not undergone a manipulation designed to induce greater identification with the work group. As predicted, the timing of fairness-relevant experiences showed a primacy effect on fairness judgments and acceptance of authority in the high identification conditions and no evidence of such an effect in the low identification conditions. The implications of the findings for understanding the psychology of justice and for real-world justice phenomena are discussed. Copyright 2001 Academic Press.
Attribute Framing and Goal Framing Effects in Health Decisions
Krishnamurthy P, Carter P and Blair E
Levin, Schneider, and Gaeth (LSG, 1998) have distinguished among three types of framing-risky choice, attribute, and goal framing-to reconcile conflicting findings in the literature. In the research reported here, we focus on attribute and goal framing. LSG propose that positive frames should be more effective than negative frames in the context of attribute framing, and negative frames should be more effective than positive frames in the context of goal framing. We test this framework by manipulating frame valence (positive vs negative) and frame type (attribute vs goal) in a unified context with common procedures. We also argue that the nature of effects in a goal-framing context may depend on the extent to which the research topic has "intrinsic self-relevance" to the population. In the context of medical decision making, we operationalize low intrinsic self-relevance by using student subjects and high intrinsic self-relevance by using patients. As expected, we find complete support for the LSG framework under low intrinsic self-relevance and modified support for the LSG framework under high intrinsic self-relevance. Overall, our research appears to confirm and extend the LSG framework. Copyright 2001 Academic Press.
Managing Workplace Conflict in the United States and Hong Kong
Tinsley CH and Brett JM
We propose that managers have norms (standards of appropriate behavior) for resolving conflict, that these norms are culturally based, and that they explain cultural differences in conflict management outcomes. We confirm that the traditionally American norms of discussing parties' interests and synthesizing multiple issues were exhibited more strongly by American managers than by their Hong Kong Chinese counterparts. In addition, we confirm that the traditionally Chinese norms of concern for collective interests and concern for authority appeared more strongly among Hong Kong Chinese managers than among their American counterparts. American managers were more likely than Hong Kong Chinese managers, to resolve a greater number of issues and reach more integrative outcomes, while Hong Kong Chinese managers were more likely to involve higher management in conflict resolution. Culture had a significant effect on whether parties selected an integrative outcome rather than an outcome that involved distribution, compromise, higher management, or no resolution at all. Conflict norms explained the cultural differences that existed between reaching an integrative outcome and reaching an outcome involving distribution, compromise, or higher management; however, conflict norms did not fully explain the cultural differences that existed between reaching an integrative outcome and reaching no resolution. Copyright 2001 Academic Press.
The Assessment of Goal Commitment: A Measurement Model Meta-Analysis
Klein HJ, Wesson MJ, Hollenbeck JR, Wright PM and DeShon RP
Goals are central to current treatments of work motivation, and goal commitment is a critical construct in understanding the relationship between goals and performance. Inconsistency in the measurement of goal commitment hindered early research in this area but the nine-item, self-report scale developed by Hollenbeck, Williams, and Klein (1989b), and derivatives of that scale, have become the most commonly used measures of goal commitment. Despite this convergence, a few authors, based on small sample studies, have raised questions about the dimensionality of this measure. To address the conflicting recommendations in the literature regarding what items to use in assessing goal commitment, the current study combines the results of 17 independent samples and 2918 subjects to provide a more conclusive assessment by combining meta-analytic and multisample confirmatory factor analytic techniques. This effort reflects the first combined use of these techniques to test a measurement model and allowed for the creation of a database substantially larger than that of previously factor analyzed samples containing these scale items. By mitigating sampling error, the results clarified a number of debated issues that have arisen out of previous small sample factor analyses and revealed a five-item scale that is unidimensional and equivalent across measurement timing, goal origin, and task complexity. It is recommended that this five-item scale be used in future research assessing goal commitment. Copyright 2001 Academic Press.
Gain-Loss Framing and Choice: Separating Outcome Formulations from Descriptor Formulations
Mandel DR
This article reexamines the assumptions underlying the disease problem used by Tversky and Kahneman (1981) to illustrate gain-loss formulation effects. It is argued that their reported effect may have been due to asymmetries in the ambiguity of the sure and risky prospects and to the entanglement of two distinct types of formulation manipulations: one having to do with the expected outcomes that are made explicit (positive vs negative) and the other having to do with the descriptors used to convey the relevant expected outcomes (lives saved/not saved vs lives lost/not lost). Two experiments using a formally equivalent problem in which these confounds were eliminated revealed no significant predictive effect of either descriptor or outcomes frames on choice, although a marginally significant framing effect was obtained in Experiment 1 when the signs of the two framing manipulations were congruent. Implications for prospect theory are discussed. Copyright 2001 Academic Press.
When Equal Chances = Good Chances: Verbal Probabilities and the Equiprobability Effect
Teigen KH
When six equally qualified candidates compete for the same position, p = 1/6 for each. People seem to accept this principle more readily for numerical than for verbal probabilities. Equal chances with three to six alternatives are often verbally described in a positive vein as "entirely possible" or "a good chance" and rarely negatively as "doubtful" or "improbable." This equiprobability effect of verbal probabilities is demonstrated in five studies describing job applicants, lottery players, competing athletes, and examination candidates. The equiprobability effect is consistent with a causal (propensity) view of probabilities, where chances are believed to reflect the relative strength of facilitating and preventive causes. If important conditions in support of the target outcome are present (the candidate is qualified for the position), and there is little to prevent it from occurring (no stronger candidates), chances appear to be good. In the presence of obstacles (one stronger candidate), or in the absence of facilitating conditions (the candidate is poorly qualified), chances appear to be poor, even when numerical p values remain constant. The findings indicate that verbal and numerical probability estimates can reflect different intuitions. Copyright 2001 Academic Press.
The Influence of Alternative Outcomes on Gut-Level Perceptions of Certainty
Windschitl PD and Young ME
Recent research has demonstrated that the perceived certainty of a focal outcome depends not only on the overall amount of evidence supporting the alternatives to the focal outcome, but also on how that evidence is distributed across those alternatives (e.g., Windschitl & Wells, 1998). Three experiments replicated this alternative-outcomes effect across a variety of evidence distributions and investigated a heuristic comparison account for the effect. Participants provided gut-level certainty estimates for winning hypothetical raffles in which they and several other players held specified numbers of tickets. Results revealed that alternative-outcomes effects are not dependent on variations in the rank-order status of the focal outcome (Experiment 1) and are reliable but reduced in magnitude when the focal outcome is the least likely outcome (Experiment 2). Also, consistent with a core premise of the heuristic comparison account, evidence supporting the strongest alternative outcome was shown to play the primary role in producing alternative-outcomes effects (Experiment 3). Copyright 2001 Academic Press.
Bonus and Penalty in Common Pool Resource Dilemmas under Uncertainty
Rapoport A and Au WT
Common pool resource (CPR) dilemmas constitute a class of social dilemmas in which equilibrium behavior results in Pareto deficient outcomes that are not at all desirable by the group. We focus on a class of CPR dilemmas that, in addition to strategic uncertainty about the harvesting behavior of the other group members, include environmental uncertainty about the size of the CPR. In an attempt to decrease the rate of requests from the common pool, and thereby increase individual payoffs, we extend previous research-both theoretically and experimentally-in two different directions. In the bonus treatment, a reward is given to the agent(s) who requests the least, and in the penalty treatment, a charge is imposed on the agent(s) who requests the most. We show that under equilibrium play the bonus treatment decreases total group request, whereas the penalty treatment increases it. Our experimental results do not support this prediction. Rather, both treatments considerably decrease the rate of request and, therefore, increase the rate of provision. The penalty treatment is shown to be more effective in reducing individual requests and enhancing provision rates than the bonus treatment. Copyright 2001 Academic Press.
The Role of Inferences in Sequential Bargaining with One-Sided Incomplete Information: Some Experimental Evidence
Srivastava J
Two experiments tested a sequential bargaining model with one-sided incomplete information and time discounting. The findings suggest that although the comparative statics of the normative model are somewhat descriptive of the qualitative features of the data, bargainers do not conform to the signaling process that underlies bargaining models with incomplete information. Rather than assess and refine a probabilistic assessment of the private information based on the informed bargainer's behavior, uninformed bargainers infer their opponents' competitiveness. Further, bargainers are unable to use cost of delay in the strategic manner dictated by the equilibrium solution. The evidence suggests that although bargaining behavior is primarily determined by situational constraints, bargainers attribute their opponents' behavior to personal disposition, such as their level of competitiveness. Copyright 2001 Academic Press.