Ultimatum Offers and the Role of Transparency: An Experimental Study of Information Acquisition
AbstractThis paper analyses individual information acquisition in an ultimatum game with a-priori unknown outside options. We find that while individual play seems to accord reasonably well with the distribution of empirical behavior, contestants seem to grossly overweigh the value of information. While information acquisition seems to be excessive in all of our scenarios we identify a significant difference in behavior related to market transparency. In transparent markets, when respondents can observe whether bidders have acquired information, acceptance rates are higher. Accordingly, information is more valuable in transparent markets, both individually and socially.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2003-16.
Length: 21 pages
Date of creation: Jun 2003
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-10-12 (All new papers)
- NEP-COM-2003-10-12 (Industrial Competition)
- NEP-EXP-2003-10-12 (Experimental Economics)
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