We experimentally study behavior in bargaining situations under large risks. To implement realistic risks involved in the field, we calibrate the experimental parameters from an environment involving substantial variation in profits, the motion picture industry. The leading example is the production of a movie that may give rise to a sequel, so actors and producers negotiate sequentially. We analyze the data in light of alternative behavioral approaches to understanding bargaining behavior under large risk.
|Journal||New Zealand Economic Papers|
|Publication status||Published - 2009|