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Preferences, Intentions, and Expectations: A Large-Scale Experiment with a Representative Subject Pool

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  • Bellemare, Charles

    ()
    (Université Laval)

  • Kröger, Sabine

    ()
    (Université Laval)

  • van Soest, Arthur

    ()
    (Tilburg University)

Abstract

We specify and estimate an econometric model which separately identifies distributional preferences and the effects of perceived intentions on responder behavior in the ultimatum game. We allow the effects of perceived intentions to depend, among other things, on the subjective probabilities responders attach to the possible offers. We estimate the model on a large representative sample from the Dutch population. We find that the relative importance of distributional preferences and perceived intentions depends significantly on the socioeconomic characteristics of responders. Strong inequity aversion to the other player’s disadvantage is found for lower educated and older respondents. Responders tend to punish unfavorable offers more if they expect that fair proposals will occur with higher probability.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3022.

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Length: 32 pages
Date of creation: Sep 2007
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2011, 78 (3), 349-365
Handle: RePEc:iza:izadps:dp3022

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Keywords: intentions; subjective expectations; inequity aversion;

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  1. Jeannette Brosig & Joachim Weimann & Chun-Lei Yang, 2003. "The Hot Versus Cold Effect in a Simple Bargaining Experiment," Experimental Economics, Springer, vol. 6(1), pages 75-90, June.
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  3. Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities," Econometrica, Econometric Society, Econometric Society, vol. 76(4), pages 815-839, 07.
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  6. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  7. Georg Kirchsteiger & Martin Dufwenberg, 2004. "A theory of sequential reciprocity," ULB Institutional Repository 2013/5899, ULB -- Universite Libre de Bruxelles.
  8. Bellemare, Charles & Kroger, Sabine, 2007. "On representative social capital," European Economic Review, Elsevier, vol. 51(1), pages 183-202, January.
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  12. Werner Güth & Carsten Schmidt & Matthias Sutter, 2003. "Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 4(2), pages 243-265, 05.
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  15. Huck, Steffen, 1999. "Responder behavior in ultimatum offer games with incomplete information," Journal of Economic Psychology, Elsevier, vol. 20(2), pages 183-206, April.
  16. Heike Hennig-Schmidt & Zhu-Yu Li & Chaoliang Yang, 2004. "Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining," Bonn Econ Discussion Papers, University of Bonn, Germany bgse22_2004, University of Bonn, Germany.
  17. Bahry, Donna L. & Wilson, Rick K., 2006. "Confusion or fairness in the field? Rejections in the ultimatum game under the strategy method," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 37-54, May.
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Cited by:
  1. Ernst Fehr, 2009. "On the economics and biology of trust," IEW - Working Papers 399, Institute for Empirical Research in Economics - University of Zurich.
  2. Fehr, Ernst & Schmidt, Klaus M., 2010. "On inequity aversion: A reply to Binmore and Shaked," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 101-108, January.
  3. Eckel, Catherine & Gintis, Herbert, 2010. "Blaming the messenger: Notes on the current state of experimental economics," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 109-119, January.

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