Can Information Backfire? - Experimental Evidence from the Ultimatum Game

Anders Poulsen () and Jonathan Tan

No 04-16, Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: We investigate experimentally if an option to obtain free information can disadvantage a player, relative to when information is unavailable. In the Ultimatum game, the Responder chooses a minimum acceptable offer and the Proposer decides at the same time whether to obtain and use information about the minimum acceptable offer. We find that the option of using free information on average reduces Proposers’, and increases Responders’, payoff, but by less than predicted. This is due to the presence of Proposers who either refuse information or who use it in a self-servingly fair manner. Information changes the distribution of the surplus, and increases inefficiency.

Keywords: Information; information acquisition; value of information; Ultimatum game; fairness; self-serving fairness (search for similar items in EconPapers)
JEL-codes: C70 D63 D80 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2004-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:aareco:2004_016

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