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Social Comparisons in Ultimatum Bargaining

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  • Iris Bohnet
  • Richard Zeckhauser

Abstract

Experiments are used to examine the effects of social comparisons in ultimatum bargaining. We inform responders about the average offer before they decide whether to accept or reject their specific offer. This significantly increases offers and offer‐specific rejection probabilities. For comparison, we consider another change in informational conditions: telling responders the total pie is $30—ex ante it was either $15 or $30—affects offers and rejection probabilities roughly as much. Our results are consistent with people’s dislike for deviations from the norm of equity but inconsistent with fairness theories, where people dislike income disparity between themselves and their referents.

Suggested Citation

  • Iris Bohnet & Richard Zeckhauser, 2004. "Social Comparisons in Ultimatum Bargaining," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 495-510, October.
    • Handle: RePEc:bla:scandj:v:106:y:2004:i:3:p:495-510
    DOI: 10.1111/j.0347-0520.2004.00376.x
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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