Bias in a Blink: In Search for the Lower Bound of Self-Serving Bias

University essay from Handelshögskolan i Stockholm/Institutionen för nationalekonomi

Abstract: Self-serving bias is a phenomenon describing how people conflate what is fair with what benefits one self. It is a source to inefficiency through bargaining impasse. In this thesis we aim to present an experimental design that has a cleaner setup and is easier to replicate than the leading experiment conducted by Babcock and Loewenstein for the first time in 1993. We find that with our setup, the same self-serving bias can be induced in judgement of fair outcomes. The evidence is not however strong enough to statistically prove how this further causes impasse to negotiations. We contribute to the research field by showing the lower bound for the conditions under which self-serving bias occurs. A second contribution new to the field is that those who are most likely to be self-serving biased are the unprivileged parts in negotiations.

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