Interpersonal Comparisons of Utility in Bargaining: Evidence from a Transcontinental Ultimatum Game

Romina Boarini (), Jean-François Laslier and Stéphane Robin
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Romina Boarini: OCDE, 2 rue Andre Pascal, 75775 Paris Cedex 16, France
Jean-François Laslier: Département d'Economie, ÃEcole Polytechnique, 91128 Palaiseau Cedex, FRANCE
Stéphane Robin: University of Lyon, Lyon, F-69003, France; CNRS, UMR 5824, GATE, Ecully, F-69130, France; ENS LSH, Lyon, F-69007, FranceTitle: Interpersonal Comparisons of Utility in Bargaining : Evidence from a Transcontinental Ultimatum Game

No 922, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Etienne (GATE Lyon St-Etienne), Université de Lyon

Abstract: This paper presents the experimental results of a "Transcontinental Ultimatum Game" implemented between India and France. The bargaining took the form of standard ultimatum games, but in one treatment Indian subjects made offers to French subjects and, in another treatment, French subjects made offers to Indian subjects. We observed that French-Indian bargaining mostly ended up with unequal splits of money in favour of French, while nearly equal splits were the most frequent outcome in Indian-French interactions. The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.

Keywords: Interpersonal Comparisons of Utility; Fairness; Bargaining experiment; Ultimatum Game (search for similar items in EconPapers)
JEL-codes: C70 C91 D63 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:0922

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