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Participation costs for responders can reduce rejection rates in ultimatum bargaining

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  • Wichardt, Philipp C.
  • Schunk, Daniel
  • Schmitz, Patrick W.

Abstract

The data reported in this paper show that in an ultimatum mini-game rejection rates of low offers are significantly reduced if participation for responders is voluntary but costly. A possible explanation based on cognitive dissonance and loss aversion is offered.

Suggested Citation

  • Wichardt, Philipp C. & Schunk, Daniel & Schmitz, Patrick W., 2009. "Participation costs for responders can reduce rejection rates in ultimatum bargaining," Economics Letters, Elsevier, vol. 103(1), pages 33-35, April.
  • Handle: RePEc:eee:ecolet:v:103:y:2009:i:1:p:33-35
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    Cited by:

    1. Elmar Lukas & Andreas Welling, 2011. "The Impact of Managerial Flexibility on Negotiation Strategy and Bargaining Power," FEMM Working Papers 110008, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    2. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.

    More about this item

    Keywords

    Cognitive dissonance Loss aversion Participation costs Sunk costs Ultimatum game;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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