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Responders’ dissatisfaction may provoke fair offer

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  • Wenxin Xie
  • Yong Li
  • Yougui Wang
  • Keqiang Li

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    Abstract

    In this article, we attempt to explain the fair outcome of ultimatum game experiments using the evolutionary dynamics. The players of the game, the proposers and the responders, are randomly matched to play the game. When the responders face low offers from the proposers, their decisions are influenced by not only the monetary payoff but also their feelings. To quantify the responders’ feelings, a degree of dissatisfaction is introduced into the game. Asymmetrical replicator dynamics is used to study the evolution of the proportion of players with different strategies. The solutions of the differential equations exhibit complex outcomes mainly depending on the degree of dissatisfaction. It could also be inferred from our results that people can maintain their rights and interests well when they have a strong sense of unfairness. Copyright Springer-Verlag 2012

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Economic Interaction and Coordination.

    Volume (Year): 7 (2012)
    Issue (Month): 2 (October)
    Pages: 197-207

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    Handle: RePEc:spr:jeicoo:v:7:y:2012:i:2:p:197-207

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    Web page: http://www.springer.com/economics/economic+theory/journal/11403

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    Related research

    Keywords: Sub-game perfect; Replicator dynamics; Evolutionary equilibrium; C73; D03; D63;

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    References

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    1. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics, University of Munich, Department of Economics.
    2. Robert Hoffmann & Jin-Yee Tee, 2003. "Adolescent-Adult Interactions and Culture in the Ultimatum Game," Occasional Papers, Industrial Economics Division 5, Industrial Economics Division.
    3. Guth, Werner & Tietz, Reinhard, 1990. "Ultimatum bargaining behavior : A survey and comparison of experimental results," Journal of Economic Psychology, Elsevier, Elsevier, vol. 11(3), pages 417-449, September.
    4. Brenner, Thomas & Vriend, Nicolaas J., 2006. "On the behavior of proposers in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 61(4), pages 617-631, December.
    5. Burnell, Stephen J. & Evans, Lewis & Yao, Shuntian, 1999. "The Ultimatum Game: Optimal Strategies without Fairness," Games and Economic Behavior, Elsevier, Elsevier, vol. 26(2), pages 221-252, January.
    6. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, Econometric Society, vol. 50(1), pages 97-109, January.
    7. Napel, Stefan, 2003. "Aspiration adaptation in the ultimatum minigame," Games and Economic Behavior, Elsevier, Elsevier, vol. 43(1), pages 86-106, April.
    8. Bolton, Gary E, 1991. "A Comparative Model of Bargaining: Theory and Evidence," American Economic Review, American Economic Association, American Economic Association, vol. 81(5), pages 1096-136, December.
    9. David Dickinson, 2000. "Ultimatum decision-making: A test of reciprocal kindness," Theory and Decision, Springer, Springer, vol. 48(2), pages 151-177, March.
    10. Bolton Gary E. & Zwick Rami, 1995. "Anonymity versus Punishment in Ultimatum Bargaining," Games and Economic Behavior, Elsevier, Elsevier, vol. 10(1), pages 95-121, July.
    11. Kirchsteiger, Georg, 1994. "The role of envy in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 25(3), pages 373-389, December.
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