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Can Information Backfire? - Experimental Evidence from the Ultimatum Game

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Author Info

  • Poulsen, Anders U.

    ()
    (Department of Economics, Aarhus School of Business)

  • Tan, Jonathan H.W.

    ()
    (Institute of Microeconomics, European University Viadrina)

Abstract

We investigate experimentally if an option to obtain free information can disadvantage a player, relative to when information is unavailable. In the Ultimatum game, the Responder chooses a minimum acceptable offer and the Proposer decides at the same time whether to obtain and use information about the minimum acceptable offer. We find that the option of using free information on average reduces Proposers’, and increases Responders’, payoff, but by less than predicted. This is due to the presence of Proposers who either refuse information or who use it in a self-servingly fair manner. Information changes the distribution of the surplus, and increases inefficiency.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 04-16.

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Length: 36 pages
Date of creation: 10 Dec 2004
Date of revision:
Handle: RePEc:hhs:aareco:2004_016

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research

Keywords: Information; information acquisition; value of information; Ultimatum game; fairness; self-serving fairness;

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