Spillovers and conflict in wage bargaining: Experimental evidence

Lehr, Alex; Vyrastekova, Jana; Akkerman, Agnes; Torenvlied, René

doi:10.1016/j.socec.2016.05.002

Cited by 5 publications

(12 citation statements)

References 31 publications

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“…The effect of the value of these references outcomes is linearly modeled for the CORRELATED, CORRELATED/REPUTATION, and UNCORRELATED/ REPUTATION treatment conditions. In line with our previous findings (Lehr et al, 2016), the effect is allowed to vary depending on its position relative to the initial focal point 12 in the UNCORRELATED treatment condition. This non-linearity initially manifests in the union players' opening proposals as a V-shaped relationship between the reference outcome value and the value of the opening proposal with a kink at 12 points, and carries over to the divergence during the bargaining process.…”

Section: Experimental Evidencementioning

confidence: 61%

“…Second, when firm reputations are known, the impact of horizontal spillovers resulting from social comparisons is altered. Without knowledge about a firm's past, unions anticipate the firm's potentially self-serving use of reference outcomes and respond to unfavorable reference outcomes with escalating demands (Lehr et al, 2016). Knowing that the firm is fair based on its reputation prevents such escalation.…”

Section: Resultsmentioning

confidence: 99%

“…Firm negotiators are less susceptible to making comparisons due to their superior information about their own ability to pay (see also Lehr et al, 2016). However, there is no a priori reason to believe that the firm negotiators are immune to making comparisons.…”

Section: Reference-dependent Preferences: Social Comparisons and Expementioning

confidence: 99%

“…This knowledge gap is aggravated by empirical difficulties in adequately identifying spillovers using traditional econometric data related to the inherently ambiguous choice of appropriate reference negotiations to investigate and the high potential for spurious correlations (see Heckman, 1991;Manski, 1993;Mitchell, 1982) In this study, we present a theoretical framework for studying horizontal and vertical spillovers, each resulting from different mechanisms. Building on a previous study of horizontal spillovers (Lehr et al, 2016) taken in isolation, we then study the impact of vertical spillovers on conflict in an environment that also allows for horizontal spillovers using a bargaining experiment. Two causal mechanisms for vertical spillovers are investigated: reputation effects and expectation effects.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Horizontal and vertical spillovers in wage bargaining: A theoretical framework and experimental evidence

Lehr¹,

Vyrastekova²,

Akkerman³

et al. 2018

Rationality and Society

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Conflict in wage bargaining is affected by information about other bargaining units and information about the past of the bargaining unit. We develop a theoretical framework for such spillovers and detail four distinct mechanisms. Rational learning and social comparisons are reviewed as mechanisms for the influence of information about other bargaining units, and reputation and expectation effects are reviewed as mechanisms for the influence of information about the past of the bargaining unit. Article 754079R SS0010.1177/1043463117754079Rationality and SocietyLehr et al. research-article2018Rationality and Society 30 (1) Building upon a previous experimental study, we implement an unstructured, timelimited, two-person bargaining game with asymmetric information and investigate the impact of reputation and expectation effects. The experimental treatments vary with respect to spillover-inducing information available to the participants. The results suggest that reputation effects decrease conflict, whereas expectation effects tend to increase conflict. Moreover, reputation effects diminish the influence of social comparisons but can augment the effects of rational learning.

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Section: Experimental Evidencementioning

confidence: 61%

Section: Resultsmentioning

confidence: 99%

Section: Reference-dependent Preferences: Social Comparisons and Expementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Horizontal and vertical spillovers in wage bargaining: A theoretical framework and experimental evidence

Lehr¹,

Vyrastekova²,

Akkerman³

et al. 2018

Rationality and Society

Self Cite

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show abstract

“…Festinger, 1954). Alternatively, spillovers may also be driven by a process of rational learning (Kuhn and Gu, 1999), which can only occur if the outcomes and conflicts of bargaining in one bargaining Firm neGotiators in the netherlands unit reveal private information in other bargaining units because this information is correlated within sectors (Lehr and al., 2013). Spillovers within sectors may thus be expected to have more influence than spillovers across sectors.…”

Section: Spillovers and Proximitymentioning

confidence: 99%

The Influence of External Information on Collective Bargaining: Survey Evidence of Union and Firm Negotiators in the Netherlands

Lehr

Akkerman

Torenvlied

2015

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External information is generally assumed to greatly affect collective bargaining, yet rigorous empirical investigations of the influence of this information on union and firm negotiators are surprisingly scarce. Comprehensive standardized survey data measuring the influence of external information on negotiators in the Netherlands were analyzed to reveal the extent to which negotiators were influenced by different types of external information and how differences in these influences could be explained by the characteristics of negotiators and bargaining units. the findings indicate that the influence of external information a) increased with proximity of the information source; b) was usually greater for union negotiators than for firm negotiators; and in some cases c) modestly increased with negotiator experience; and d) was greater in company bargaining than in sector bargaining.

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Open to offers, but resisting requests: How the framing of anchors affects motivation and negotiated outcomes.

Majer

Trötschel

Galinsky

et al. 2020

Journal of Personality and Social Psychology

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Abundant research has established that first proposals can anchor negotiations and lead to a first-mover advantage. The current research developed and tested a motivated anchor adjustment hypothesis that integrates the literatures on framing and anchoring and highlights how anchoring in negotiations differs in significant ways from standard decision-making contexts. Our research begins with the premise that first proposals can be framed as either an offer of resources (e.g., I am offering my A for your B) that highlights gains versus a request for resources (e.g., I am requesting your B for my A) that highlights losses to a responder. We propose that this framing would affect the concession aversion of responders and ultimately the negotiated outcomes. We predicted that when a first proposal is framed as an offer, the well-documented anchoring and first-mover advantage effect would emerge because offers do not create high levels of concession aversion. In contrast, because requests highlight what the responder has to give up, we predicted that opening requests would produce concession aversion and eliminate and even reverse the first-mover advantage. Across 5 experiments, the classic first-mover advantage in negotiations was moderated by the framing of proposals because anchor framing affected concession aversion. The studies highlight how motivational forces (i.e., concession aversion) play an important role in producing anchoring effects, which has been predominantly viewed through a purely cognitive lens. Overall, the findings highlight when and how motivational processes play a key role in both judgmental heuristics and mixed-motive decision-making.

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Spillovers and conflict in wage bargaining: Experimental evidence

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Cited by 5 publications

References 31 publications

Horizontal and vertical spillovers in wage bargaining: A theoretical framework and experimental evidence

Horizontal and vertical spillovers in wage bargaining: A theoretical framework and experimental evidence

The Influence of External Information on Collective Bargaining: Survey Evidence of Union and Firm Negotiators in the Netherlands

Open to offers, but resisting requests: How the framing of anchors affects motivation and negotiated outcomes.

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