Cognitive Dissonance, Risk Aversion and the Pretrial Negotiation Impasse

Cognitive Dissonance in Negotiation 1 Running Head: COGNITIVE DISSONANCE IN NEGOTIATION Cognitive dissonance in negotiation: Free choice or counter-attitudinal justification?

Previous research suggests that negotiators inflate their valuation for offers they make and devalue offers they choose not to make due to the psychological process of cognitive dissonance reduction. Research outside of the negotiation context suggests that cognitive dissonance is induced either by being forced to choose among relatively equal options or by having to justify a counterattitudina...

Risk Aversion and Supply Chain Contract Negotiation

Pretrial Negotiation, Litigation, and Procedural Rules

We model the ci il dispute resolution process as a two-stage game with the parties bargaining to reach a settlement in the first stage and then playing a litigation expenditure game at trial in the second stage. We find that the English rule shifts the settlement away from the interim fair and unbiased settlement in most circumstances. O erall welfare changes are in fa or of the party who makes...

Cognitive Load Increases Risk Aversion

We investigate how stable individuals’ risk attitudes are with respect to changes in cognitive load. In a laboratory experiment using pairwise lottery choice and a within-subject design, we show that putting subjects under load via a concurrent working-memory task significantly increases their risk aversion. Subjects made significantly faster choices under load. Regardless of load, they respond...

Cognitive Dissonance

Almost half a century ago social psychologist Leon Festinger developed the cognitive dissonance theory (Festinger, 1957). The theory has obviously stood the test of time in that it is mentioned in most general and social psychology textbooks today. The theory is somewhat counterintuitive and, in fact, fits into a category of counterintuitive social psychology theories sometimes referred to as a...