 Fairness and risk in ultimatum bargainingKyle Hyndman and Matthew Walker Games and Economic Behavior, 2022, vol. 132, issue C, 90-105 Abstract: We conduct an ultimatum bargaining experiment but, rather than bargaining over money, subjects bargain over lottery tickets for a mutually exclusive prize. We find that proposers offer a significantly lower percentage of lottery tickets to responders than the equivalent offer when bargaining over money. In contrast, responders have a significantly higher acceptance threshold, which is consistent with responders being risk averse and possessing ex-post fairness concerns. This difference can be rationalized if proposers have incomplete information or incorrect beliefs about responders' preferences. We provide evidence supportive of proposers holding incorrect beliefs. Specifically, we observe an incongruence between how sensitive proposers expect responders to be to regret, and how sensitive responders are. By varying the timing of responders' decision, we show that intentions matter and present evidence of an anomaly in responders' preferences. Specifically, when responders decide after the resolution of uncertainty, they are more willing to accept extreme inequality. Keywords: Fairness; Risk; Ultimatum bargaining; Social preferences (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:132:y:2022:i:c:p:90-105 DOI: 10.1016/j.geb.2021.12.003 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.