Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining

Heike Hennig-Schmidt, Zhu-yu Li and Chaoliang Yang

No 22/2004, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: When using the strategy method in ultimatum bargaining, many researchers ask responders for the minimal acceptable offer only implicitly assuming strategies to be monotone. Recent research has shown, however, that subjects decline disadvantageous and advantageous proposals. We report on an ultimatum game video experiment where more than 50 percent of the responders rejected advantageous offers. Proposers and responders acted together in groups of three people each and were video taped during decision making. The videotapes then were content analyzed. Our experimental design provides the unique opportunity to learn from participants’ spontaneous discussions about their motivations for rejecting advantageous offers. Main motives are social concern, non-expectancy of high offers, emotional, ethical, and moral reasons, group-specific decision rules and aversion against unpleasant numbers.

Keywords: ultimatum game; video experiments; strategy method; content analysis; non-monotone strategies; social preferences (search for similar items in EconPapers)
JEL-codes: C78 C81 C91 C92 F00 O53 O57 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:222004

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