I want to know: Willingness to pay for unconditional veto power

Werner Güth (), René Levínský (), Tobias Uske and Thomas Gehrig

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: In the Yes/No game, like in the ultimatum game, proposer and responder can share a monetary reward. In both games the proposer suggests a reward distribution which the responder can accept or reject (yielding 0-payoffs). The games only differ in that the responder does (not) learn the suggested reward distribution in the Ultimatum (Yes/No) game. Although an opportunistic responder would always accept and therefore should not be willing to pay for knowing the proposal, earlier results (Güth, Levati, Ockenfels, and Weiland, 2005) show that offers in the Yes/No game are less generous and that responders, on average, earn less in the Yes/No game. By experimentally eliciting the willingness to pay for learning the proposal, we investigate whether these effects are adequately anticipated or whether they are overstated, as observed in an earlier related study (Gehrig, Güth, Levinsky, 2003).

Keywords: Information acquisition; Endowment effect; Veto power; Anticipation; Decision strategy (search for similar items in EconPapers)
JEL-codes: C91 D82 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2006-09
New Economics Papers: this item is included in nep-exp and nep-gth
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