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Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining

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  • Heike Hennig-Schmidt
  • Zhu-Yu Li
  • Chaoliang Yang

Abstract

When using the strategy method in ultimatum bargaining, many researchers ask responders for the minimal acceptable offer only implicitly assuming strategies to be monotone. Recent research has shown, however, that subjects decline disadvantageous and advantageous proposals. We report on an ultimatum game video experiment where more than 50 percent of the responders rejected advantageous offers. Proposers and responders acted together in groups of three people each and were video taped during decision making. The videotapes then were content analyzed. Our experimental design provides the unique opportunity to learn from participants’ spontaneous discussions about their motivations for rejecting advantageous offers. Main motives are social concern, non-expectancy of high offers, emotional, ethical, and moral reasons, group-specific decision rules and aversion against unpleasant numbers.

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Bibliographic Info

Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse22_2004.

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Length: 32
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:bon:bonedp:bgse22_2004

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

Related research

Keywords: ultimatum game; video experiments; strategy method; content analysis; non-monotone strategies; social preferences;

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References

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Cited by:
  1. Bellemare, C. & Kroger, S. & Soest, A.H.O. van, 2008. "Measuring inequity aversion in a heterogeneous population using experimental decisions and subjective probabilities," Open Access publications from Tilburg University urn:nbn:nl:ui:12-376716, Tilburg University.
  2. Charles Bellemare & Sabine Kroger & Arthur van Soest, 2005. "Actions and Beliefs: Estimating Distribution-Based Preferences Using a Large Scale Experiment with Probability Questions on Expectations," Cahiers de recherche 0523, CIRPEE.
  3. Daniel Houser & Erte Xiao, 2011. "Classification of natural language messages using a coordination game," Experimental Economics, Springer, vol. 14(1), pages 1-14, March.
  4. Charles Bellemare & Sabine Kroger & Arthur van Soest, 2007. "Preferences, Intentions, and Expectations: a Large-Scale Experiment with a Representative Subject Pool," Cahiers de recherche 0721, CIRPEE.
  5. Sven Fischer, 2005. "Inequality Aversion in Ultimatum Games with Asymmetric Conflict Payoffs - A Theoretical and Experimental Analysis -," Papers on Strategic Interaction 2005-36, Max Planck Institute of Economics, Strategic Interaction Group.

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