In bargaining situations, buyers and sellers do not gauge offers solely at the light of their self-interested material gains, but also seem to take into account non-monetary considerations such as fairness or reciprocity. This paper attemps to quantify these non-monetary motives in a buyer-seller context. We fit a model to a simple negotiation game data to quantify the role of fairness considerations in negotiation behavior, and then use the model to obtain out-of-sample estimates of play in more complex, sequential negotiation games. The model embeds a social utility function, a probabilistic decision rule, and captures experience effects. The out-of-sample test data comes from 6 previously reported studies, encompassing 20 distinct parameterizations of the sequential negotiation game. The model is remarkably accurate with respect to directional findings and to out-of-sample estimates of average first offers, accounting for 95% of the variability in the data. Out-of-sample estimates of rejection behavior account for more than half the variability. The results suggest that the influence of non-monetary considerations on bargainer decision can be reliably quantified to predict negotiations outcomes.
DE BRUYN, A. and BOLTON, G.E. (2005). Predicting Bargaining Behavior when Money is not All that Matters: The Role of Fairness Considerations in Shaping Price Agreements.