Learning (Not) To Yield: An Experimental Study of Evolving Ultimatum Game Behavior

Judith Avrahami, Werner Güth (), Ralph Hertwig, Yaakov Kareev and Hironori Otsubo
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Judith Avrahami: The Hebrew University of Jerusalem, Center for the Study of Rationality and School of Education
Ralph Hertwig: University of Basel, Department of Psychology
Yaakov Kareev: The Hebrew University of Jerusalem, Center for the Study of Rationality and School of Education

No 2010-092, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Whether behavior converges toward rational play or fair play in repeated ultimatum games depends on which player yields first. If responders concede first by accepting low offers, proposers would not need to learn to offer more, and play would converge toward unequal sharing. By the same token, if proposers learn fast that low offers are doomed to be rejected and adjust their offers accordingly, pressure would be lifted from responders to learn to accept such offers. Play would converge toward equal sharing. Here we tested the hypothesis that it is regret-both material and strategic-which determines how players modify their behavior. We conducted a repeated ultimatum game experiment with random strangers, in which one treatment does and another does not provide population feedback in addition to informing players about their own outcome. Our results show that regret is a good predictor of the dynamics of play. Specifically, we will turn to the dynamics that unfold when players make repeated decisions in the ultimatum game with randomly changing opponents, and when they learn not only about their own outcome in the previous round but also find out how the population on average has adapted to previous results (path dependence).

Keywords: Ultimatum bargaining game; Reputation; Regret; Learning; Experiment (search for similar items in EconPapers)
JEL-codes: C78 C92 (search for similar items in EconPapers)
Date: 2010-12-15
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Learning (not) to yield: An experimental study of evolving ultimatum game behavior (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2010-092

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