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Are Behavioral Choices in the Ultimatum and Investment Games Strategic?

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  • Lora R. Todorova

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Bodo Vogt

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

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    Abstract

    This paper experimentally examines the relationship between self-reporting risk preferences and behavioral choices in the subsequently played dictator, ultimatum and investment games. The results from these experiments are used to discern the motivational bases of behavioral choices in the ultimatum and investment games. The focus is on investigating whether strategic considerations are important for strategy selection in the two games. We find that self-reporting risk preferences does not alter the dictators' offers and trusters' investments, while it significantly decreases the proposers' offers and leads to a substantial decrease in the amount trustees give back to their partners. We interpret these results as evidence that the decisions of proposers in the ultimatum game and trustees in the investment game are strategic.

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    File URL: http://www.fww.ovgu.de/fww_media/femm/femm_2012/2012_21.pdf
    File Function: First version, 2011
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    Bibliographic Info

    Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 120021.

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    Length: 28 pages
    Date of creation: Sep 2012
    Date of revision:
    Handle: RePEc:mag:wpaper:120021

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    Related research

    Keywords: coordination game; dictator game; ultimatum game; investment game; questionnaire; risk scale; risk preferences;

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    References

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    16. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
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