Fairness in an Embedded Ultimatum Game

Paul Pecorino () and Mark Van Boening

Journal of Law and Economics, 2010, vol. 53, issue 2, 263-287

Abstract: We embed an ultimatum game in a stylized legal bargaining framework. This changes the framing of the standard ultimatum game in several ways but also moves the bargaining closer to what is found in some naturally occurring settings. In this context, the ultimatum game is played over the joint surplus, which is achieved from settlement rather than a dispute. In our embedded ultimatum game, the median offer contains only 8 percent of the joint surplus from settlement. When we replicate the simple ultimatum game, we find that 50 percent of the joint surplus is contained in the median offer. (c) 2010 by The University of Chicago. All rights reserved.

Date: 2010
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