Moral Entitlements and Aspiration Formation in Asymmetric Bargaining: Experimental Evidence from Germany and China

Games. 2017. Vol. 8. No. 4.

Hennig-Schmidt H., Walkowitz G.

Using a unique experimental data set, we investigate how asymmetric legal rights shape
bargainers’ aspiration levels through moral entitlements derived from equity norms and number
prominence. Aspiration formation is typically hard to observe in real life. Our study involves
15 negotiations from Germany and China. Over the course of the negotiation, bargainers discuss
the distribution of an amount of money by alternating offers until they consent or break off. Legal
rights are randomly assigned by asymmetric outside options. We videotape and code the in-group
discussions. In total, verbal data from 30 groups, 1100 pages of transcripts, and 65 h of discussions
are content-analyzed. Our main finding is that strong groups derive and defend moral entitlements
from equity concerns with regard to their outside options. They strive for equitable but unequal
distributions (e.g., proportional split and split the difference). Moral entitlements materialize in the
recorded aspiration levels and final payoffs, which exceed the equal split. By contrast, weak groups
aim at equality. Over the course of the negotiation, equity tends to lose, while the prominence of
round numbers gains importance. Similarities between the subject pools are found in that equity
and prominence are both decisive for the formation of aspiration levels. Chinese negotiations are
characterized by long periods of stagnation, only minimal concessions, and the communication of
false goals. By contrast, Germans steadily reduce their goals and make concessions.

Keywords: cross-cultural comparison