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Social Comparisons in Ultimatum Bargaining

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  • Bohnet, Iris

    (Harvard U)

  • Zeckhauser, Richard

    (Harvard U)

Abstract

This paper employs experiments to examine the effects of social comparisons in ultimatum bargaining. We inform responders on the average offer before they decide whether to accept or reject their specific offer. To provide a metric for social comparison effects, we compare them with another change in informational conditions, asymmetric information on the pie size. Knowing comparable offers or knowing the pie size increases offers and rejection probabilities by similar magnitudes. Our results are consistent with people disliking deviations from the norm of equity but inconsistent with fairness theories, where people dislike income disparity between themselves and their referents.

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Bibliographic Info

Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp03-028.

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Date of creation: Jun 2003
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Handle: RePEc:ecl:harjfk:rwp03-028

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  14. Mitzkewitz,Michael & Nagel,Rosemarie, . "Envy,greed and anticipation in ultimatum games with incomplete information: An experimental study," Discussion Paper Serie B :181, University of Bonn, Germany.
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  16. Harrison, Glenn W & McCabe, Kevin A, 1996. "Expectations and Fairness in a Simple Bargaining Experiment," International Journal of Game Theory, Springer, Springer, vol. 25(3), pages 303-27.
  17. Knez Marc J. & Camerer Colin F., 1995. "Outside Options and Social Comparison in Three-Player Ultimatum Game Experiments," Games and Economic Behavior, Elsevier, Elsevier, vol. 10(1), pages 65-94, July.
  18. Bruno S. Frey & Iris Bohnet, 1999. "Social Distance and Other-Regarding Behavior in Dictator Games: Comment," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 335-339, March.
  19. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, American Economic Association, vol. 90(1), pages 166-193, March.
  20. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, Elsevier, vol. 13(1), pages 100-110, March.
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