On the Behavior of Proposers in Ultimatum Games

Thomas Brenner () and Nicolaas J. Vriend ()

No 502, Working Papers from Queen Mary, University of London, Department of Economics

Abstract: We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show experimentally that proposers do not learn to make the expected-payoff-maximizing offer. Second, considering a range of learning theories (from optimal to boundedly rational), we explain that this is an inherent feature of the learning task faced by the proposers, and we provide some insights into the actual learning behavior of the experimental subjects. This explanation for the lack of convergence to the subgame perfect Nash equilibrium in ultimatum games complements most alternative explanations.

Keywords: Ultimatum game; Non-equilibrium behavior; Laboratory experiment; Multi-armed bandit; Optimal learning; Gittins index; Bounded rationality (search for similar items in EconPapers)
JEL-codes: C72 C91 D81 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-ind
Date: Written

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Related works:
Working Paper: On the Behavior of Proposers in Ultimatum Games (2003)
Working Paper: On the Behavior of Proposers in Ultimatum Games (2003)
Journal Article: On the behavior of proposers in ultimatum games (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:qmw:qmwecw:wp502

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