Self-serving bias

A self-serving bias occurs when people are more likely to claim responsibility for successes than failures. It may also manifest itself as a tendency for people to evaluate ambiguous information in a way beneficial to their interests. Dale Miller and Michael Ross first suggested this attributional bias. Self-serving bias also results in a statistical bias resulting from people thinking that they perform better than average in areas important to their self esteem. For example a majority of drivers think they drive better than the average.

For instance, a student who gets a good grade on an exam might say, "I got an A!" while a student who does poorly on an exam might say, "The teacher gave me an F!" When someone seeks out external causes for their poor performance, it may be labeled self-handicapping. Self-serving bias may simply be a form of wishful thinking.

Self-serving bias may result in bargaining impasse if each side interprets the facts of the dispute in their own favor. In this situation one or more of the parties may refuse to continue negotiating, believing the other side is either bluffing or refusing to accept a reasonable settlement and thus deserves to be ‘punished.’

There is a good deal of experimental evidence to support this hypothesis. In one experiment which assigned participants to either the plaintiff or defendant in a hypothetical automotive accident tort case with a maximum potential damages payment of $100,000, the plaintiff’s prediction of the likely judicial award was on average $14,500 higher than the defendant’s. The plaintiff’s average nomination of a ‘fair’ figure was $17,700 higher than the defendant’s. When parties subsequently attempted to negotiate a settlement agreement, the discrepancy between the two sides' assessment of a fair compensation figure strongly correlated with whether or not parties reached an agreement within a set period of time. Note that this experiment was conducted with real money with one real dollar being equal to $10,000 experimental dollars and that if parties did not reach a negotiated agreement the case was decided by a third party and each side had to pay costly court and legal fees.

Group-serving bias is a similar bias on the group level.