An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers

Paul G. Straub; J. Keith Murnighan

doi:10.1016/0167-2681(94)00072-M

An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers

Paul G. Straub^*, J. Keith Murnighan

^*Corresponding author for this work

Management and Organizations

Research output: Contribution to journal › Article › peer-review

187 Scopus citations

Abstract

We designed two laboratory experiments to test popular hypotheses explaining the failure of subgame-perfect equilibrium models to explain behavior in ultimatum games. The first experiment varied information available to respondents. When respondents did not know the amount being divided, offerers offered (and respondents accepted) significantly lower offers than when the respondents knew the amount being divided. The second experiment replicated this result and also showed that people occasionally reject "free" money (i.e., offers with no strings attached). This evidence does not support earlier explanations for ultimatum anomalies and identifies conditions where subgame-perfect models apply.

Original language	English (US)
Pages (from-to)	345-364
Number of pages	20
Journal	Journal of Economic Behavior and Organization
Volume	27
Issue number	3
DOIs	https://doi.org/10.1016/0167-2681(94)00072-M
State	Published - Aug 1995

Keywords

Bargaining
Experiments
Ultimatum games

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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10.1016/0167-2681(94)00072-M

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title = "An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers",

abstract = "We designed two laboratory experiments to test popular hypotheses explaining the failure of subgame-perfect equilibrium models to explain behavior in ultimatum games. The first experiment varied information available to respondents. When respondents did not know the amount being divided, offerers offered (and respondents accepted) significantly lower offers than when the respondents knew the amount being divided. The second experiment replicated this result and also showed that people occasionally reject {"}free{"} money (i.e., offers with no strings attached). This evidence does not support earlier explanations for ultimatum anomalies and identifies conditions where subgame-perfect models apply.",

keywords = "Bargaining, Experiments, Ultimatum games",

author = "Straub, {Paul G.} and Murnighan, {J. Keith}",

note = "Funding Information: We would like to thank Daniel Arce, Max Bazerman,G ary Bolton, Rachel T.A. Croson, Hank Farber, Kevin Gibson, Charles Kahn, Al Kinderman, Madan Pillutla, Amnon Rapoport, Alvin E. Roth, the participantsi n the Summer Institute for Negotiation and Dispute Resolution at the Centre for Advanced Study in the Behavioral Sciences, Stanford University, Summer, 1992, and two anonymous reviewers for helpful comments. Portions of this work were supportedb y a grant from the Andrew Mellon Foundation.",

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PY - 1995/8

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N2 - We designed two laboratory experiments to test popular hypotheses explaining the failure of subgame-perfect equilibrium models to explain behavior in ultimatum games. The first experiment varied information available to respondents. When respondents did not know the amount being divided, offerers offered (and respondents accepted) significantly lower offers than when the respondents knew the amount being divided. The second experiment replicated this result and also showed that people occasionally reject "free" money (i.e., offers with no strings attached). This evidence does not support earlier explanations for ultimatum anomalies and identifies conditions where subgame-perfect models apply.

AB - We designed two laboratory experiments to test popular hypotheses explaining the failure of subgame-perfect equilibrium models to explain behavior in ultimatum games. The first experiment varied information available to respondents. When respondents did not know the amount being divided, offerers offered (and respondents accepted) significantly lower offers than when the respondents knew the amount being divided. The second experiment replicated this result and also showed that people occasionally reject "free" money (i.e., offers with no strings attached). This evidence does not support earlier explanations for ultimatum anomalies and identifies conditions where subgame-perfect models apply.

KW - Bargaining

KW - Experiments

KW - Ultimatum games

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An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers

Abstract

Keywords

ASJC Scopus subject areas

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