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Short- and Long-run Goals in Ultimatum Bargaining

Author

Listed:
  • Antonio M. Espín

    (GLOBE, Departamento de Teoría e Historia Económica, Universidad de Granada)

  • Filippos Exadaktylos

    (BELIS, Murat Sertel Center for Advanced Economic Studies, Istanbul Bilgi University)

  • Benedikt Herrmann

    (Institute for Health and Consumer Protection, Joint Research Centre, European Commission)

  • Pablo Brañas-Garza

    (Economic Science Institute, and Department of Economics and International Development, Middlesex University Business School)

Abstract

The ultimatum game (UG) is widely used to study human bargaining behavior and fairness norms. In this game, two players have to agree on how to split a sum of money. The proposer makes an offer, which the responder can accept or reject. If the responder rejects, neither player gets anything. The prevailing view is that, beyond self-interest, the desire to equalize both players’ payoffs (i.e., fairness) is the crucial motivation in the UG. Based on this view, previous research suggests that responders follow short-run psychological incentives when imposing fairness through the rejection of low offers. However, competitive spite, which reflects the desire to reduce others’ payoffs, can also account for the behavior observed in the UG, and has been linked to short-run, present-oriented aspirations as well. In this paper, we explore the relationship between individuals’ inter-temporal preferences and their behavior in a large-scale dual-role UG experiment. We find that impatience (present orientation) predicts the rejection of low, “unfair” offers as responders and the proposal of low, “unfair” offers as proposers, which is consistent with spite but inconsistent with fairness motivations. This behavior systematically reduces the payoffs of those who interact with impatient individuals. Thus, impatient individuals appear to be keen on reducing their partners’ share of the pie, even at the risk of destroying it. These findings indicate that competitive spite, rather than fairness, is the short-run motivation in ultimatum bargaining.

Suggested Citation

  • Antonio M. Espín & Filippos Exadaktylos & Benedikt Herrmann & Pablo Brañas-Garza, 2013. "Short- and Long-run Goals in Ultimatum Bargaining," Working Papers 13-17, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:13-17
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    References listed on IDEAS

    as
    1. Jaime Iranzo & Luis M Floría & Yamir Moreno & Angel Sánchez, 2012. "Empathy Emerges Spontaneously in the Ultimatum Game: Small Groups and Networks," PLOS ONE, Public Library of Science, vol. 7(9), pages 1-8, September.
    2. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
    3. Filippos Exadaktylos & Antonio M. Espin & Pablo Branas-Garza, 2012. "Experimental Subjects are Not Different," Working Papers 12-11, Chapman University, Economic Science Institute.
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    Citations

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    Cited by:

    1. Brice Corgnet & Antonio M. Espin & Roberto Hernán-González, 2015. "The cognitive basis of social behavior : cognitive reflection overrides antisocial but not always prosocial motives," Post-Print hal-02311954, HAL.
    2. Antonio Cabrales & Antonio M. Espín & Praveen Kujal & Stephen Rassenti, 2017. "Humans’ (incorrect) distrust of reflective decisions," Working Papers 17-05, Chapman University, Economic Science Institute.
    3. Shanshan Zhen & Rongjun Yu, 2016. "Tend to Compare and Tend to Be Fair: The Relationship between Social Comparison Sensitivity and Justice Sensitivity," PLOS ONE, Public Library of Science, vol. 11(5), pages 1-17, May.
    4. Martin, Jesus & Branas, Pablo & Espín, Antonio M. & Gamella, Juan & Herrmann, Benedikt, 2018. "The appropriate response of Spanish Gitanos: Short-run orientation beyond current socio-economic status," MPRA Paper 84591, University Library of Munich, Germany.
    5. Neuman, Shoshana & Brañas-Garza, Pablo & Espin, Antonio M., 2013. "Effects of religiosity on social behaviour: Experimental evidence from a representative sample of Spaniards," CEPR Discussion Papers 9709, C.E.P.R. Discussion Papers.
    6. Brañas-Garza, Pablo & Chowdhury, Subhasish M. & Espín, Antonio M. & Nieboer, Jeroen, 2023. "‘Born this Way’? Prenatal exposure to testosterone may determine behavior in competition and conflict," Journal of Economic Psychology, Elsevier, vol. 96(C).
    7. Yanling Zhang & Feng Fu, 2018. "Strategy intervention for the evolution of fairness," PLOS ONE, Public Library of Science, vol. 13(5), pages 1-13, May.
    8. Antonio M. Espin & Angel Sanchez & Benedikt Herrmann, 2017. "Economic preferences 2.0: Connecting competition, cooperation and inter-temporal preferences," Discussion Papers 2017-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    9. Rassenti, Stephen & Espin, Antonio M. & Kujal, Praveen, 2017. "Humans’ (incorrect) distrust of reflective decisions," CEPR Discussion Papers 11949, C.E.P.R. Discussion Papers.
    10. Valerio Capraro & Brice Corgnet & Antonio M. Espin & Roberto Hernan-Gonzalez, 2016. "Deliberation favors social efficiency by helping people disregard their relative shares: Evidence from US and India," Discussion Papers 2016-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    11. Brañas-Garza, Pablo & Espín, Antonio M. & Lenkei, Balint, 2015. "BMI is not related to altruism, fairness, trust or reciprocity: Experimental evidence from the field and the lab," MPRA Paper 68184, University Library of Munich, Germany.
    12. Espín, Antonio M. & Brañas-Garza, Pablo & Gamella, Juan & Herrmann, Benedikt & Martin, Jesus, 2019. "Bringing together “old” and “new” ways of solving social dilemmas? The case of Spanish Gitanos," MPRA Paper 95423, University Library of Munich, Germany.
    13. Antonio M. Espín & Dolores Moreno-Herrero & José Sánchez-Campillo & José A. Rodríguez Martín, 2018. "Do Envy and Compassion Pave the Way to Unhappiness? Social Preferences and Life Satisfaction in a Spanish City," Journal of Happiness Studies, Springer, vol. 19(2), pages 443-469, February.
    14. Espín, Antonio M. & Correa, Manuel & Ruiz-Villaverde, Alberto, 2019. "Patience predicts cooperative synergy: The roles of ingroup bias and reciprocity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).

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    Keywords

    ultimatum game; costly punishment; delay discounting; impatience; fairness; spite; cooperation; competition;
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