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Advice and behavior in intergenerational ultimatum games: An experimental approach

  • Schotter, Andrew
  • Sopher, Barry

In the real world, when people play games, they often receive advice from those that have played it before them. Such advice can facilitate the creation of a convention of behavior. This paper studies the impact of advice on the behavior subjects who engage in a non-overlapping generational Ultimatum game where after a subject plays he is replaced by another subject to whom he can offer advice. Our results document the fact that allowing advice has a dramatic impact on the behavior of subjects. It diminishes the variance of offers made over time, lowers their mean, and causes Receivers to reject low offers with higher probability. In addition, by reading the advice offered we conclude that arguments of fairness are rarely used to justify the offers of Senders but are relied upon to justify rejections by Receivers.

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

Volume (Year): 58 (2007)
Issue (Month): 2 (February)
Pages: 365-393

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Handle: RePEc:eee:gamebe:v:58:y:2007:i:2:p:365-393
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  1. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  2. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
  3. Bogachan Celen & Shachar Kariv & Andrew Schotter, 2003. "The Advice Puzzle: An Experimental Study of Social Learning Where Words Speak Louder Than Actions," Levine's Bibliography 666156000000000184, UCLA Department of Economics.
  4. Drew Fudenberg & David K. Levine, 1993. "Self-Confirming Equilibrium," Levine's Working Paper Archive 2147, David K. Levine.
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  7. Jordi Brandts & Gary Charness, 1998. "Hot vs. cold: Sequential responses and preference stability in experimental games," Economics Working Papers 321, Department of Economics and Business, Universitat Pompeu Fabra.
  8. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-95, December.
  9. Ananish Chaudhuri & Andrew Schotter & Barry Sopher, 2009. "Talking Ourselves to Efficiency: Coordination in Inter-Generational Minimum Effort Games with Private, Almost Common and Common Knowledge of Advice," Economic Journal, Royal Economic Society, vol. 119(534), pages 91-122, 01.
  10. Dufwenberg, Martin & Gneezy, Uri, 2000. "Measuring Beliefs in an Experimental Lost Wallet Game," Games and Economic Behavior, Elsevier, vol. 30(2), pages 163-182, February.
  11. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  12. Yaw Nyarko & Andrew Schotter, 2002. "An Experimental Study of Belief Learning Using Elicited Beliefs," Econometrica, Econometric Society, vol. 70(3), pages 971-1005, May.
  13. H. Peyton Young & Mary A. Burke, 2001. "Competition and Custom in Economic Contracts: A Case Study of Illinois Agriculture," American Economic Review, American Economic Association, vol. 91(3), pages 559-573, June.
  14. van Damme, Eric, 1998. "On the State of the Art in Game Theory: An Interview with Robert Aumann," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 181-210, July.
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