IDEAS home Printed from https://ideas.repec.org/a/isp/journl/v17y2023i1p166-180.html
   My bibliography  Save this article

Analysis Tools Of Positional Investments And The Ultimatum Game

Author

Listed:
  • Petr Mach
  • Jan Pokorný
  • Radim Valenčík

Abstract

This paper deals with the analysis of players' decision-making, using tools describing the role of positional investing. It discusses the differences between predicted and empirically observed decision- making in the ultimate game (UG). Empirically observed behavior has its rational basis in evaluating the bargaining position of future conflicts. We extend Nash's bargaining problem with a positional neutrality function. The positional neutrality function identifies an area of possible agreement in which one player's position in future games is not improved at the expense of the other. We used this analytical tool in a pilot UG experiment with 64 participants. We study the player's reactions in the experiment after adding additional information on future investment possibilities. Findings from the seven-rounded UG experiment support the predictive ability of positional neutrality functions. Hence, we assume that the “notion of fairness” can be explained as the “notion of positional neutral pay-off division.”

Suggested Citation

  • Petr Mach & Jan Pokorný & Radim Valenčík, 2023. "Analysis Tools Of Positional Investments And The Ultimatum Game," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 17(1), pages 166-180.
    • Handle: RePEc:isp:journl:v:17:y:2023:i:1:p:166-180
    as

    Download full text from publisher

    File URL: https://www.scientific-publications.net/get/1000060/1698073662342939.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. Thomson,William & Lensberg,Terje, 2006. "Axiomatic Theory of Bargaining with a Variable Number of Agents," Cambridge Books, Cambridge University Press, number 9780521027038.
    3. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    4. Kaveh Madani & Keith Hipel, 2011. "Non-Cooperative Stability Definitions for Strategic Analysis of Generic Water Resources Conflicts," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(8), pages 1949-1977, June.
    5. Joseph Henrich, 2000. "Does Culture Matter in Economic Behavior? Ultimatum Game Bargaining among the Machiguenga of the Peruvian Amazon," American Economic Review, American Economic Association, vol. 90(4), pages 973-979, September.
    6. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May.
    7. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
    8. Joseph Henrich, 2000. "Does culture matter in economic behavior? Ultimatum game bargaining among the machiguenga," Artefactual Field Experiments 00067, The Field Experiments Website.
    9. William Thomson (ed.), 2010. "Bargaining and the Theory of Cooperative Games: John Nash and Beyond," Books, Edward Elgar Publishing, number 13317.
    10. Radim Valenčík & Benedikt Frank & Bastian Schulz, 2022. "Conflict Analysis Tools In Situations Related To Nash'S Bargaining Problem," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 16(1), pages 293-305.
    11. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 171-188, June.
    12. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    13. Ondřej Černík & Radim Valenčík & Petr Wawrosz, 2020. "Economics Of Productive Consumption And Multipoint Expansion Of Nash Bargaining Problem," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 14(1), pages 10-25.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gagen, Michael, 2013. "Isomorphic Strategy Spaces in Game Theory," MPRA Paper 46176, University Library of Munich, Germany.
    2. Qi, Tianxiao & Xu, Bin & Wu, Jinshan & Vriend, Nicolaas J., 2022. "On the Stochasticity of Ultimatum Games," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 227-254.
    3. Liqi Zhu & Gerd Gigerenzer & Gang Huangfu, 2013. "Psychological Traces of China's Socio-Economic Reforms in the Ultimatum and Dictator Games," PLOS ONE, Public Library of Science, vol. 8(8), pages 1-6, August.
    4. Hasan, Hamid & Ejaz, Nauman, 2013. "Testing for Differences across Genders: A Replication of Ultimatum Game at International Islamic University, Islamabad," MPRA Paper 44923, University Library of Munich, Germany.
    5. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    6. Cochard, François & Le Gallo, Julie & Georgantzis, Nikolaos & Tisserand, Jean-Christian, 2021. "Social preferences across different populations: Meta-analyses on the ultimatum game and dictator game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    7. Luigi Mittone & Andrew Musau, 2016. "Communication, sequentiality and strategic power. A prisoners� dilemma experiment," CEEL Working Papers 1603, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    8. Alexander Lenger & Stephan Wolf & Nils Goldschmidt, 2021. "Choosing inequality: how economic security fosters competitive regimes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(2), pages 315-346, June.
    9. Chen, Daniel L. & Schonger, Martin, 2016. "A Theory of Experiments: Invariance of Equilibrium to the Strategy Method of Elicitation and Implications for Social Preferences," TSE Working Papers 16-724, Toulouse School of Economics (TSE), revised Feb 2020.
    10. Irlenbusch, Bernd, 2004. "Relying on a man's word?: An experimental study on non-binding contracts," International Review of Law and Economics, Elsevier, vol. 24(3), pages 299-332, September.
    11. Burnham, Terence C., 2013. "Toward a neo-Darwinian synthesis of neoclassical and behavioral economics," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages 113-127.
    12. Sun-Ki Chai & Dolgorsuren Dorj & Katerina Sherstyuk, 2018. "Cultural Values and Behavior in Dictator, Ultimatum, and Trust Games: An Experimental Study," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 89-166, Emerald Group Publishing Limited.
    13. Werner, Katharina & Graf Lambsdorff, Johann, 2016. "Emotional numbing and lessons learned after a violent conflict - Experimental evidence from Ambon, Indonesia," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-74-16, University of Passau, Faculty of Business and Economics.
    14. Matteo M. Galizzi & Daniel Navarro-Martinez, 2019. "On the External Validity of Social Preference Games: A Systematic Lab-Field Study," Management Science, INFORMS, vol. 65(3), pages 976-1002, March.
    15. 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.
    16. van Damme, Eric & Binmore, Kenneth G. & Roth, Alvin E. & Samuelson, Larry & Winter, Eyal & Bolton, Gary E. & Ockenfels, Axel & Dufwenberg, Martin & Kirchsteiger, Georg & Gneezy, Uri & Kocher, Martin G, 2014. "How Werner Güth's ultimatum game shaped our understanding of social behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 292-318.
    17. Rodriguez-Lara, Ismael, 2016. "Equity and bargaining power in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 144-165.
    18. Horak, Sven, 2013. "Cross-cultural experimental economics and indigenous management research: Issues and contributions," Working Papers on East Asian Studies 92/2013, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    19. Luis José Blas Moreno Garrido, 2015. "Relative Injustice Aversion," Working Papers. Serie AD 2015-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    20. 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.

    More about this item

    Keywords

    nash bargaining problem; game theory; ultimatum game; positional investment neutrality function;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isp:journl:v:17:y:2023:i:1:p:166-180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Svetoslav Ivanov (email available below). General contact details of provider: https://www.scientific-publications.net/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.