Non-acceptance of Losses—An Experimental Study on the Importance of the Sign of Final Outcomes in Ultimatum Bargaining

Thomas Neumann, Stephan Schosser () and Bodo Vogt ()
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Stephan Schosser: Chair in Empirical Economics
Bodo Vogt: Chair in Empirical Economics

A chapter in Operations Research Proceedings 2017, 2018, pp 287-292 from Springer

Abstract: Abstract Many real-life situations, e.g., budget allocation within universities or negotiations between insurance companies over compensation for damages, etc., highlight the relevance of distribution problems. In many corresponding situations, it is not only positive outcomes that need to be divided but also negative or combinations of positive and negative ones. Previous research typically focuses on distribution problems that emerge either in a gain or in a loss domain or on a comparison between the two domains. In this experimental study, we focused on the behavior of players in two modified versions of an ultimatum game that implemented asymmetric strategic advantages for the players, i.e., the game allowed for both, positive and negative overall payoffs for both players. We found that (1) the bargaining behavior of the proposers was in line with previous research findings, i.e., most proposers offered between 40 and 50% of the pie to the responder, and (2) the responders, in contrast to literature on gains or losses, oriented their behavior towards breaking-even. Their desire to break-even seemed to act as a stronger motive than their preference to secure an equal split.

Date: 2018
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DOI: 10.1007/978-3-319-89920-6_39

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