Strategic Uncertainty Aversion in Bargaining - Experimental Evidence

Publication: Scientific journalJournal articlepeer-review


In a series of four experiments I demonstrate the existence of significant aversion to basically non-existent strategic uncertainty in very simple bargaining games. This aversion goes far beyond ordinary risk or ambiguity aversion. Specifically, although almost nobody expects or chooses the rejection of an offered equal split in a bargaining game, participants behave as if there would be a considerably large rejection rate for equal splits. This behavior is robust across experimental designs and subject pools, can lead to inefficiencies in markets, and is incompatible with consistency of strategies and rational beliefs.
Original languageEnglish
Article number102604
JournalJournal of Economic Psychology
Publication statusE-pub ahead of print - Jan 2023

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