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 | |
| State | Published - Aug 1995 |
Funding
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.
Keywords
- Bargaining
- Experiments
- Ultimatum games
ASJC Scopus subject areas
- Economics and Econometrics
- Organizational Behavior and Human Resource Management