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Interpersonal comparisons of utility in bargaining: evidence from a transcontinental ultimatum game

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Author Info

  • Romina Boarini

    (OFCE - Observatoire Français des Conjonctures économiques - Observatoire Français des Conjonctures économiques)

  • Jean-François Laslier

    (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)

  • Stéphane Robin

    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)

Abstract

This paper presents the experimental results of a “Transcontinental Ultimatum Game” implemented between India and France. We use a standard ultimatum game, but in one treatment Indian subjects made offers to French subjects (ItoF treatment) and, in another treatment, French subjects made offers to Indian subjects (FtoI treatment). We observed that FtoI treatment bargaining mostly ended up with unequal splits of money in favor of French, while nearly equal splits were the most frequent outcome in ItoF treatment interactions. The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00451566.

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Date of creation: 2009
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Publication status: Published, Theory and Decision, 2009, 67, 4, pp 341-373
Handle: RePEc:hal:journl:halshs-00451566

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Keywords: Interpersonal Comparisons of Utility ; Fairness; Bargaining experiment ; Ultimatum Game;

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References

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  1. Georg Kirchsteiger, 1994. "The role of envy in ultimatum games," ULB Institutional Repository 2013/5925, ULB -- Universite Libre de Bruxelles.
  2. G. Bolton, 2010. "A comparative model of bargaining: theory and evidence," Levine's Working Paper Archive 263, David K. Levine.
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  6. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  7. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis," Experimental Economics, Springer, Springer, vol. 7(2), pages 171-188, 06.
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  12. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 3(4), pages 367-388, December.
  13. 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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  16. Tyran, Jean-Robert, 2003. "Behavioral Game Theory. Experiments in Strategic Interaction: Colin F. Camerer, Princeton University Press, Princeton, New Jersey, 2003, p. 550, Price $65.00/[UK pound]42.95, ISBN 0-691-09039-4," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 32(6), pages 717-720, December.
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Cited by:
  1. Werner Güth & Martin G. Kocher, 2013. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2013-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Gari Walkowitz & Clemens Oberhammer & Heike Hennig-Schmidt, 2004. "Experimenting over a Long Distance - A method to facilitate intercultural experiments," Bonn Econ Discussion Papers, University of Bonn, Germany bgse17_2004, University of Bonn, Germany, revised Dec 2005.

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