Negotiating a coalition - Risk, quota shaving, and learning to bargain

The authors examine how negotiators' risk preferences influence the formati on of coalitions. Joining a coalition may either increase or mitigate risk depending on the nature of the bargaining problem. In an experimental setti ng, the authors test whether relative risk preferences influence the likeli hood of joining a coalition and the distribution of payoffs in coalitions t hat form. With inexperienced bargainers, risk preferences predict coalition composition but not payoff distribution. This may reflect the fairly egali tarian agreements reached by these coalitions. With experienced bargainers, risk preferences are unrelated to coalition membership but do predict the distribution of payoffs. Risk preferences influence the course of negotiati on in a different manner as parties learn to use both their alternatives an d their risk preferences as sources of bargaining power.