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Ultimatum Bargaining Behavior in Israel, Japan, Slovenia, and the United States: A Social Utility Analysis

  • Costa-Gomes, Miguel
  • Zauner, Klaus G.

We explain the main features of the results of the four-country ultimatum bargaining experiments of Roth, Prasnikar, Okuno-Fujiwara, and Zamir (1991) by a social utility model. The specification of social utility of a player has two parts: a linear combination of the monetary payoffs of the proposer and the responder, and payoff uncertainty. We find that, on average, responders have negative regard for proposers’ earnings in all countries. Proposers have negative regard for responders’ monetary earnings in countries where responders have high negative regard for proposers’ earnings (USA and Slovenia). In countries where responders have low negative regard for proposers’ earnings (Israel and Japan), proposers are expected payoff maximizers.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 34 (2001)
Issue (Month): 2 (February)
Pages: 238-269

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Handle: RePEc:eee:gamebe:v:34:y:2001:i:2:p:238-269
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