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Subgame perfection in ultimatum bargaining trees

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  • Stahl, Dale O.
  • Haruvy, Ernan

Abstract

In typical experiments on ultimatum bargaining, the game is described verbally and the majority of subjects deviate from subgame-perfect behavior. Proposers typically offer significantly more than the minimum possible and Responders reject "unfair" offers. In this work, we show that when the ultimatum bargaining game is presented as an abstract game tree, the vast majority of behavior is consistent with individualistic preferences and subgame-perfection. This finding raises doubts about theories that ignore the potential influence of social context and experiments that do not control for social context.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 63 (2008)
Issue (Month): 1 (May)
Pages: 292-307

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Handle: RePEc:eee:gamebe:v:63:y:2008:i:1:p:292-307

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Web page: http://www.elsevier.com/locate/inca/622836

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Citations

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Cited by:
  1. Lechner, Susanne & Ohr, Renate, 2008. "The right of withdrawal in the treaty of Lison: A game theoretic reflection on different decision processes in the EU," Center for European, Governance and Economic Development Research Discussion Papers 77, University of Goettingen, Department of Economics.
  2. Philipp C. Wichardt & Daniel Schunk & Patrick W. Schmitz, 2008. "Participation costs for responders can reduce rejection rates in ultimatum bargaining," IEW - Working Papers 398, Institute for Empirical Research in Economics - University of Zurich.
  3. Oechssler, Jörg & Roider, Andreas & Schmitz, Patrick W., 2008. "Cooling-Off in Negotiations - Does It Work?," Sonderforschungsbereich 504 Publications 08-06, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  4. Lechner, Susanne & Ohr, Renate, 2008. "The right of withdrawal in the treaty of Lison: A game theoretic reflection on different decision processes in the EU," Center for European, Governance and Economic Development Research Discussion Papers 77, University of Goettingen, Department of Economics.
  5. Declerck, Carolyn H. & Kiyonari, Toko & Boone, Christophe, 2009. "Why do responders reject unequal offers in the Ultimatum Game? An experimental study on the role of perceiving interdependence," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 335-343, June.
  6. Nguyen, N.P. & Shortle, J.S. & Reed, P.M. & Nguyen, T.T., 2013. "Water quality trading with asymmetric information, uncertainty and transaction costs: A stochastic agent-based simulation," Resource and Energy Economics, Elsevier, vol. 35(1), pages 60-90.

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