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The effect of endogenous endowments: evidence from a mini-ultimatum game

Author

Listed:
  • Michael D. Carr

    (University of Massachusetts Boston)

  • Philip Mellizo

    (College of Wooster)

Abstract

We extend the mini ultimatum game to investigate the effect of two types of endogenous endowments: one created by real effort and one created by subjects' choices in a risky environment. Compared to an exogenous endowment, the probability of rejection for a given size endowment is more than 44% lower when responder effort generates the endowment. However, rejection rates differ across endowment sizes: the probability of rejecting a low offer increases with endowment size when the responder produces the endowment, and decreases with endowment size when the endowment is determined exogenously. The results differ considerably from the only other real-effort ultimatum game experiment, indicating that more research is needed in this area to better interpret why offers are rejected in the ultimatum game.

Suggested Citation

  • Michael D. Carr & Philip Mellizo, 2017. "The effect of endogenous endowments: evidence from a mini-ultimatum game," Economics Bulletin, AccessEcon, vol. 37(4), pages 2552-2560.
    • Handle: RePEc:ebl:ecbull:eb-17-00558
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    References listed on IDEAS

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    Cited by:

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    2. Mago, Shakun D. & Pate, Jennifer & Razzolini, Laura, 2024. "Experimental evidence on the role of outside obligations in wage negotiations," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 528-548.
    3. Larney, Andrea & Rotella, Amanda & Barclay, Pat, 2019. "Stake size effects in ultimatum game and dictator game offers: A meta-analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 151(C), pages 61-72.

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    More about this item

    Keywords

    Ultimatum Game; Real Effort; Fairness;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics

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