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Reputations and Fairness in Bargaining - Experimental Evidence from a Repeated Ultimatum Game With Fixed Opponents

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Author Info

  • Tilman Slembeck

    (University of St.Gallen)

Abstract

The results of Ultimatum Game experiments are often quoted as evidence for the role of fairness in bargaining or in economic behaviour more generally. This paper argues that the observed fairness levels are contingent on the traditional experimental design where players are newly matched each round, and reputations are therefore excluded. Evidence from a new experiment shows that average behaviour is more competitive and conflict rates are higher when subjects play against the same opponent repeatedly. This finding is not expected by the traditional fairness hypothesis. A detailed analysis of the dynamics of pairs of players shows that different types of players coexist in the subject pool. Whereas previous experiments found evidence for the existence of "fair" players, the present study reports also a significant number of "tough" players. Hence, there is evidence that allowing for reputations in repeated ultimatum bargaining induces different patterns of behaviour that have not been observed before in this game.

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File URL: http://128.118.178.162/eps/exp/papers/9905/9905002.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Experimental with number 9905002.

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Length: 22 pages
Date of creation: 04 May 1999
Date of revision:
Handle: RePEc:wpa:wuwpex:9905002

Note: Type of Document - PDF-File; prepared on IBM PC; to print on HP/PostScript/; pages: 22 ; figures: included. Discussion Paper No. 9904, Department of Economics, University of St.Gallen, March 1999, downloads http://www.fgn.unisg.ch/public/public.htm
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Related research

Keywords: game theory; experiments; learning; fairness; reputations; ultimatum game;

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References

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  1. Russell Cooper & Douglas V. DeJong & Thomas W. Ross, 1992. "Cooperation without Reputation: Experimental Evidence from Prisoner's Dilemma Games," Papers 0036, Boston University - Industry Studies Programme.
  2. repec:att:wimass:9102 is not listed on IDEAS
  3. David Kreps & Paul Milgrom & John Roberts & Bob Wilson, 2010. "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma," Levine's Working Paper Archive 239, David K. Levine.
  4. repec:att:wimass:9325 is not listed on IDEAS
  5. Gary E Bolton & Rami Zuwick, 2010. "Anonymity versus punishments in ultimatum bargaining," Levine's Working Paper Archive 826, David K. Levine.
  6. Andreoni,J. & Croson,R., 1998. "Partners versus strangers : random rematching in public goods experiments," Working papers 11, Wisconsin Madison - Social Systems.
  7. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-72, June.
  8. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
  9. 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.
  10. Gale, John & Binmore, Kenneth G. & Samuelson, Larry, 1995. "Learning to be imperfect: The ultimatum game," Games and Economic Behavior, Elsevier, vol. 8(1), pages 56-90.
  11. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
  12. James Andreoni & John H Miller, 1997. "Rational Cooperation in the finitely repeated prisoner's dilemma: experimental evidence," Levine's Working Paper Archive 670, David K. Levine.
  13. Mitzkewitz, Michael & Nagel, Rosemarie, 1993. "Experimental Results on Ultimatum Games with Incomplete Information," International Journal of Game Theory, Springer, vol. 22(2), pages 171-98.
  14. Rosenthal, R W, 1979. "Sequences of Games with Varying Opponents," Econometrica, Econometric Society, vol. 47(6), pages 1353-66, November.
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Citations

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Cited by:
  1. Judith Avrahami & Werner Güth & Ralph Hertwig & Yaakov Kareev & Hironori Otsubo, 2010. "Learning (Not) To Yield: An Experimental Study of Evolving Ultimatum Game Behavior," Jena Economic Research Papers 2010-092, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Davis, Douglas D. & Wilson, Bart J., 2008. "Strategic buyers, horizontal mergers and synergies: An experimental investigation," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 643-661, May.
  3. Jason Shachat & J. Todd Swarthout, 2013. "Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection," Games, MDPI, Open Access Journal, vol. 4(4), pages 738-753, November.
  4. Ben D'Exelle & Arno Riedl, 2008. "Elite Capture, Political Voice and Exclusion from Aid: An Experimental Study," CESifo Working Paper Series 2400, CESifo Group Munich.
  5. repec:fee:wpaper:1301 is not listed on IDEAS
  6. Wu, Diana Yan, 2013. "The impact of repeated interactions on supply chain contracts: A laboratory study," International Journal of Production Economics, Elsevier, vol. 142(1), pages 3-15.
  7. Tilman Slembeck, 1999. "A Behavioral Approach to Learning in Economics - Towards an Economic Theory of Contingent Learning," Microeconomics 9905001, EconWPA.
  8. Güth, Werner, 2000. "How ultimatum offers emerge: A study in bounded rationality," SFB 373 Discussion Papers 2000,29, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  9. Tilman Slembeck, 1999. "Low Information Games - Experimental Evidence on Learning in Ultimatum Bargaining," Experimental 9905001, EconWPA.
  10. Ben D'Exelle & Els Lecoutere & Bjorn Van Campenhout, 2010. "Social status and bargaining when resources are scarce: Evidence from a field lab experiment," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 10-09, School of Economics, University of East Anglia, Norwich, UK..
  11. Tilman Slembeck, 2000. "Learning in Economics: Where Do We Stand?," Microeconomics 0004007, EconWPA.
  12. Jason Shachat & J. Todd Swarthout, 2013. "Auctioning the right to play ultimatum games and the impact on equilibrium selection," Experimental Economics Center Working Paper Series 2013-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.

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