Can Information Backfire? - Experimental Evidence from the Ultimatum Game
AbstractWe 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 InfoPaper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 04-16.
Length: 36 pages
Date of creation: 10 Dec 2004
Date of revision:
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Information; information acquisition; value of information; Ultimatum game; fairness; self-serving fairness;
Find related papers by JEL classification:
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-20 (All new papers)
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