ABC on Deals

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Author
Dufwenberg, M.
Servatka, M.
Vadovic, R.
Date
2012Permanent Link
http://hdl.handle.net/10092/9799We develop, and experimentally test, a behavioral model of dealmaking which includes binding contracts and informal agreements as distinct but related special cases. The key assumptions: people are mostly honest; they suffer costs of overcoming temptation to renege; and they tend to split gains down the middle.