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Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game

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Author Info
John Kagel ()
Katherine Wolfe ()

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Abstract

Two recent models incorporating fairness considerations into the economics literature based on agents' concerns about the distribution of payoffs between themselves and others (Fehr-Schmidt, 1999, Quarterly Journal of Economics. 114 (3), 769–816; Bolton-Ockenfels, 2000, American Economic Review. 90, 166–193) are investigated using a new three-person ultimatum game: One person allocates a sum of money to two others, one of which is randomly chosen to accept or reject the offer. Rejection gives both the responder and the proposer zero income and a positive consolation prize for the non-responder. The data show essentially no reductions in rejection rates, holding offers constant, with and without consolation prizes, contrary to both models' predictions. Copyright Kluwer Academic Publishers 2001

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Publisher Info
Article provided by Springer in its journal Experimental Economics.

Volume (Year): 4 (2001)
Issue (Month): 3 (December)
Pages: 203-219
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Handle: RePEc:kap:expeco:v:4:y:2001:i:3:p:203-219

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Related research
Keywords: ultimatum game; income inequality aversion; fairness models;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August. [Downloadable!] (restricted)
  2. Dufwenberg, M. & Kirchsteiger, G., 1998. "A theory of sequential reciprocity," Discussion Paper 37, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  3. Gary Charness & Matthew Rabin, 1999. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers 441, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000. [Downloadable!]
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  4. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May. [Downloadable!] (restricted)
  5. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July. [Downloadable!] (restricted)
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  6. Fershtman, Chaim & Gneezy, Uri, 2001. "Strategic Delegation: An Experiment," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 352-68, Summer.
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  7. Gary E. Bolton & Axel Ockenfels, 1998. "Strategy and Equity: An ERC Analysis of the Guth-van Damme Game," Levine's Working Paper Archive 2060, David K. Levine. [Downloadable!]
  8. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March. [Downloadable!] (restricted)
  9. John C. Ham & John H. Kagel & Steven F. Lehrer, 2000. "Randomization, Endogeneity and Laboratory Experiments," Econometric Society World Congress 2000 Contributed Papers 1524, Econometric Society. [Downloadable!]
  10. Gary Charness, 1996. "Attribution and Reciprocity in a Simulated Labor Market: An Experimental Investigation," Economics Working Papers 283, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 1997. [Downloadable!]
  11. Gary E. Bolton & Axel Ockenfels, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March. [Downloadable!] (restricted)
  12. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March. [Downloadable!] (restricted)
  13. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ernst Fehr & Klaus M. Schmidt, 2009. "On Inequity Aversion A Reply to Binmore and Shaked," Discussion Papers 276, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  2. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September. [Downloadable!]
    Other versions:
  3. Armin Falk & Ernst Fehr & Urs Fischbacher, 2005. "Driving Forces Behind Informal Sanctions," IZA Discussion Papers 1635, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics. [Downloadable!]
    Other versions:
  5. Pamela Schmitt, 2004. "On Perceptions of Fairness: The Role of Valuations, Outside Options, and Information in Ultimatum Bargaining Games," Experimental Economics, Springer, vol. 7(1), pages 49-73, February. [Downloadable!] (restricted)
  6. Maria Montero, 2006. "Inequity Aversion May Increase Inequity," Working Papers 2006.80, Fondazione Eni Enrico Mattei. [Downloadable!]
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  7. Hayat Khan, 2009. "Modeling Social Preferences: A Generalized Model of Inequity Aversion," EERI Research Paper Series EERI_RP_2009_21, Economics and Econometrics Research Institute (EERI). [Downloadable!]
    Other versions:
  8. Charness, Gary & Kuhn, Peter, 2004. "Do Co-Workers’ Wages Matter? Theory and Evidence on Wage Secrecy, Wage Compression and Effort," IZA Discussion Papers 1417, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Grimalda, Gianluca & Kar, Anirban & Proto, Eugenio, 2006. "On the Value of Participation: Endogenous Emergence of Social Norms in a Three-Player Ultimatum Game," MPRA Paper 1620, University Library of Munich, Germany. [Downloadable!]
  10. Gary Charness & Peter Kuhn, 2005. "Pay Inequality, Pay Secrecy, and Effort: Theory and Evidence," NBER Working Papers 11786, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Andreas Nicklisch, 2008. "Inequity Aversion, Reciprocity, and Appropriateness in the Ultimatum-Revenge Game," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2008_24, Max Planck Institute for Research on Collective Goods. [Downloadable!]
  12. Bohnet, Iris & Zeckhauser, Richard, 2003. "Social Comparisons in Ultimatum Bargaining," Working Paper Series rwp03-028, Harvard University, John F. Kennedy School of Government. [Downloadable!]
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  13. Pamela Schmitt & Kurtis Swope & Robert Shupp & Justin Mayer, 2004. "Personality Preferences and Pre-Commitment: Behavioral Explanations in Ultimatum Games," Departmental Working Papers 6, United States Naval Academy Department of Economics. [Downloadable!]
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  14. Ernesto Reuben & Frans van Winden, 2006. "Reciprocity and Emotions when Reciprocators Know each other," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  15. Kurtis J. Swope & John Cadigan & Pamela M. Schmitt & Robert S. Shupp, 2005. "Personality Preferences in Laboratory Economics Experiments," Working Papers 200507, Ball State University, Department of Economics, revised Jul 2005. [Downloadable!]
    Other versions:
  16. Julio J. Rotemberg, 2006. "Minimally acceptable altruism and the ultimatum game," Working Papers 06-12, Federal Reserve Bank of Boston. [Downloadable!]
    Other versions:
  17. Daruvala, Dinky, 2006. "Would The Right Social Preference Model Please Stand Up!," Working Papers in Economics 210, Göteborg University, Department of Economics. [Downloadable!]
  18. James Cox & Daniel Friedman & Steven Gjerstad, 2004. "A Tractable Model of Reciprocity and Fairness," Experimental 0406001, EconWPA. [Downloadable!]
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  19. Gary Charness & Martin Dufwenberg, 2004. "Promises and Partnership," Levine's Bibliography 122247000000000001, UCLA Department of Economics. [Downloadable!]
    Other versions:
  20. Ernst Fehr & Klaus M. Schmidt, 2009. "On Inequity Aversion A Reply to Binmore and Shaked," Discussion Papers 256, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  21. Ernesto Reuben & Frans van Winden, . "Social Ties and Coordination on Negative Reciprocity: The Role of Affect," Discussion Papers 06-08, University of Copenhagen. Department of Economics. [Downloadable!]
    Other versions:
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