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On Feelings as a Heuristic for Making Offers in Ultimatum Negotiations

Author

Listed:
  • Stephen, Andrew T.
  • Pham, Michel Tuan

Abstract

This research examines how the reliance on emotional feelings as a heuristic influences the proposal of offers in negotiations. Results from three experiments based on the classic ultimatum game show that, compared to proposers who do not rely on their feelings, proposers who rely on their feelings make less generous offers in the standard ultimatum game, more generous offers in a variant of the game allowing responders to make counteroffers, and less generous offers in the dictator game where no responses are allowed. Reliance on feelings triggers a more literal form of play, whereby proposers focus more on how they feel toward the offers themselves than on how they feel toward the possible outcomes of these offers, as if their offers were the final outcomes. Proposers relying on their feelings also tend to focus on gist-based, simpler construals of negotiations that capture only the essential aspects of the situation.

Suggested Citation

  • Stephen, Andrew T. & Pham, Michel Tuan, 2008. "On Feelings as a Heuristic for Making Offers in Ultimatum Negotiations," MPRA Paper 8779, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8779
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    File URL: https://mpra.ub.uni-muenchen.de/8779/1/MPRA_paper_8779.pdf
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    References listed on IDEAS

    as
    1. Hogarth, Robin M. (ed.), 1990. "Insights in Decision Making," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226348551.
    2. 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.
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    Cited by:

    1. Chenxi Li & Xueming Luo & Cheng Zhang, 2017. "Sunny, Rainy, and Cloudy with a Chance of Mobile Promotion Effectiveness," Marketing Science, INFORMS, vol. 36(5), pages 762-779, September.
    2. Benoit Bediou & Klaus R Scherer, 2014. "Egocentric Fairness Perception: Emotional Reactions and Individual Differences in Overt Responses," PLOS ONE, Public Library of Science, vol. 9(2), pages 1-11, February.

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    More about this item

    Keywords

    affect; emotions; heuristics; bargaining; ultimatum game; affect as information; affect heuristic; trust in feelings;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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