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Revealing Preferences for Fairness in Ultimatum Bargaining

Author

Listed:
  • James Andreoni

    (University of California - San Diego)

  • Marco Castillo

    (Georgia Institute of Technology)

  • Ragan Petrie

    (Georgia State University)

Abstract

The ultimatum game has been the primary tool for studying bar-gaining behavior in recent years. However, not enough information is gathered in the ultimatum game to get a clear picture of responders�� utility functions. We analyze a convex ultimatum game in which responders�� can ��shrink�� an offer as well as to accept or reject it. This allows us to observe enough about responders�� preferences to estimate utility functions. We use data collected from convex ultimatum games to successfully predict behavior in standard games. Rejections can be ��rationalized�� with neo-classical preferences over own- and other-payoff that are convex, nonmonotonic, and regular.

Suggested Citation

  • James Andreoni & Marco Castillo & Ragan Petrie, 2009. "Revealing Preferences for Fairness in Ultimatum Bargaining," Korean Economic Review, Korean Economic Association, vol. 25, pages 35-63.
    • Handle: RePEc:kea:keappr:ker-20090630-25-1-02
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    References listed on IDEAS

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    Cited by:

    1. Nisvan Erkal & Lata Gangadharan & Nikos Nikiforakis, 2011. "Relative Earnings and Giving in a Real-Effort Experiment," American Economic Review, American Economic Association, vol. 101(7), pages 3330-3348, December.
    2. James Andreoni & Emily Blanchard, 2006. "Testing subgame perfection apart from fairness in ultimatum games," Experimental Economics, Springer;Economic Science Association, vol. 9(4), pages 307-321, December.
    3. Abigail Barr & Chris WallaceJean Ensminger & Joseph Henrich, 2009. "Homo Aequalis: A Cross-Society Experimental Analysis of Three Bargaining Games," Economics Series Working Papers 422, University of Oxford, Department of Economics.
    4. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    5. James Andreoni, 2006. "Giving Gifts to Groups: How Congestible is Altruism?," Levine's Bibliography 321307000000000166, UCLA Department of Economics.
    6. David Cooper & E. Dutcher, 2011. "The dynamics of responder behavior in ultimatum games: a meta-study," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 519-546, November.

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    More about this item

    Keywords

    Ultimatum Game; Bargaining Behavior; Revealing Preferences;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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