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Moral Property Rights in Bargaining with Infeasible Claims

CESifo, IZA, and School of Economics, University of Nottingham, University Park, Nottingham NG7 2RD, United Kingdom
IZA, Tinbergen Institute, and University of Amsterdam, CREED, Faculty of Economics and Econometrics, Roetersstraat 11, NL-1018 WB Amsterdam, The Netherlands
simon.gaechter{at}nottingham.ac.uk
a.m.riedl{at}uva.nl

In many business transactions, labor-management relations, international conflicts, and welfare-state reforms, bargainers hold strong entitlements that are often generated by claims that are not feasible anymore. These entitlements seem to shape negotiation behavior considerably. By using the novel setup of a "bargaining with claims" experiment, we provide new systematic evidence tracking the influence of entitlements and obligations through the whole bargaining process. We find strong entitlement effects that shape opening offers, bargaining duration, concessions, and (dis)agreements. We argue that entitlements constitute a "moral property right" that is influential independent of negotiators' legal property rights.

Key Words: moral property rights; entitlements; fairness judgments; bargaining with claims; self-serving bias; experiment
History: Received: February 27, 2004;