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Bargaining under surveillance: Evidence from a three-person ultimatum game

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  • Sääksvuori, Lauri
  • Ramalingam, Abhijit

Abstract

This paper investigates how the transparency of decision-making affects preferences over distributional outcomes. We also examine what motivates individuals to voluntarily invest economic resources to monitor decision-making processes. We find that third-party monitoring does not affect distributional outcomes in a three-person ultimatum game. Our results show that a large majority of individuals is willing to pay for a right to monitor decision-making processes despite pecuniary incentives to the contrary. We observe that third-parties are over-confident in believing that an opportunity to scrutinize decision-making processes changes distributional outcomes for their own benefit. Our results suggest that people may over-estimate the effect of transparent decision-making on economic outcomes.

Suggested Citation

  • Sääksvuori, Lauri & Ramalingam, Abhijit, 2015. "Bargaining under surveillance: Evidence from a three-person ultimatum game," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 66-78.
    • Handle: RePEc:eee:joepsy:v:51:y:2015:i:c:p:66-78
    DOI: 10.1016/j.joep.2015.08.007
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    Cited by:

    1. Casal, Sandro & Fallucchi, Francesco & Quercia, Simone, 2019. "The role of morals in three-player ultimatum games," Journal of Economic Psychology, Elsevier, vol. 70(C), pages 67-79.

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    More about this item

    Keywords

    Bargaining; Communication; Distributional preferences; Experiment; Negotiations; Surveillance;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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