Social Comparisons and Reference Group Formation: Some Expermental Evidence
AbstractWe investigate reference group formation and the impact of social comparisons on ultimatum bargaining using a laboratory experiment. Three individuals compete in a real-e¤ort task for the role of the proposer in a three-player ultimatum game. The role of the responder is randomly allocated. The third individual receives a ?fixed payment - our treatment variable - and makes no decision. The existence of a non-responder has a dramatic e¤ect on bargaining outcomes. In the most extreme treatment, more than half of the o¤ers are rejected. Behavior shows individuals exhibit self-serving bias in the way they de?ne their reference groups.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 1069.
Length: 24 pages
Date of creation: 2009
Date of revision:
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Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
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More information through EDIRC
social comparisons; ultimatum bargaining; laboratory experiments; self-serving bias; real-e¤ort;
Other versions of this item:
- McDonald, Ian M. & Nikiforakis, Nikos & Olekalns, Nilss & Sibly, Hugh, 2013. "Social comparisons and reference group formation: Some experimental evidence," Games and Economic Behavior, Elsevier, vol. 79(C), pages 75-89.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-EXP-2010-01-10 (Experimental Economics)
- NEP-GTH-2010-01-10 (Game Theory)
- NEP-NET-2010-01-10 (Network Economics)
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