Efficient Bargaining Power Disparities Deemed Fair, Upending Labor Debates
The scientists wanted to know if big differences in bargaining power are unfair when making deals. They tested this idea by putting people in situations where they had to bargain without a full agreement. They looked at if the extra benefit from the deal was agreed upon by both sides or not. They used legal ideas to define when a power difference in bargaining is fair or unfair to both the weaker and stronger sides. The test showed that efficient power differences in bargaining are not necessarily unfair.