IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Do Wealth Differences Affect Fairness Considerations?

  • Olivier Armantier

The influence of relative wealth on fairness considerations is analyzed in an ultimatum game experiment in which participants receive large and widely unequal initial endowments. Subjects initially demonstrate a concern for fairness. With time however, behavior becomes at odds with both subgame perfection and fairness. Evidence of learning is detected for both proposers and receivers in the estimation of a structural reinforcement learning model. The estimation results suggest that, guided by foregone best responses and an acquired sense of deservingness, rich subjects become more selfish, whereas poor subjects, influenced only by their own experience, learn to tolerate this behavior. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 47 (2006)
Issue (Month): 2 (05)
Pages: 391-429

in new window

Handle: RePEc:ier:iecrev:v:47:y:2006:i:2:p:391-429
Contact details of provider: Postal:
160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297

Phone: (215) 898-8487
Fax: (215) 573-2057
Web page:

More information through EDIRC

Order Information: Web: Email:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Nick Feltovich & John Duffy, 1999. "Does observation of others affect learning in strategic environments? An experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(1), pages 131-152.
  2. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
  3. Abbink, Klaus & Bolton, Gary E. & Sadrieh, Abdolkarim & Tang, Fang-Fang, 2001. "Adaptive Learning versus Punishment in Ultimatum Bargaining," Games and Economic Behavior, Elsevier, vol. 37(1), pages 1-25, October.
  4. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  5. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  6. Stahl, Dale O., 1996. "Boundedly Rational Rule Learning in a Guessing Game," Games and Economic Behavior, Elsevier, vol. 16(2), pages 303-330, October.
  7. Selten, Reinhard & Abbink, Klaus & Buchta, Joachim & Sadrieh, Abdolkarim, 2003. "How to play (3 x 3)-games.: A strategy method experiment," Games and Economic Behavior, Elsevier, vol. 45(1), pages 19-37, October.
  8. Weg, Eythan & Smith, Vernon, 1993. "On the failure to induce meager offers in ultimatum game," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 17-32, March.
  9. John C. Ham & John H. Kagel & Steven F. Lehrer, 2000. "Randomization, Endogeneity and Laboratory Experiments," Econometric Society World Congress 2000 Contributed Papers 1524, Econometric Society.
  10. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  11. Alvin E. Roth & V. Prasnikar & M. Okuno-Fujiwara & S. Zamir, 1998. "Bargaining and market behavior in Jerusalem, Liubljana, Pittsburgh and Tokyo: an experimental study," Levine's Working Paper Archive 344, David K. Levine.
  12. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis," Experimental Economics, Springer, vol. 7(2), pages 171-188, 06.
  13. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  14. Goeree, Jacob K. & Holt, Charles A., 2000. "Asymmetric inequality aversion and noisy behavior in alternating-offer bargaining games," European Economic Review, Elsevier, vol. 44(4-6), pages 1079-1089, May.
  15. Frank, Bjorn & Schulze, Gunther G., 2000. "Does economics make citizens corrupt?," Journal of Economic Behavior & Organization, Elsevier, vol. 43(1), pages 101-113, September.
  16. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
  17. Schlag, Karl H., 1996. "Which one should I imitate?," Discussion Paper Serie B 365, University of Bonn, Germany.
  18. Tilman Slembeck, 1999. "A Behavioral Approach to Learning in Economics - Towards an Economic Theory of Contingent Learning," Microeconomics 9905001, EconWPA.
  19. Binmore, K & Shaked, A & Sutton, J, 1985. "Testing Noncooperative Bargaining Theory: A Preliminary Study," American Economic Review, American Economic Association, vol. 75(5), pages 1178-80, December.
  20. Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 209-219, Spring.
  21. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  22. Bewley, Truman F., 1998. "Why not cut pay?," European Economic Review, Elsevier, vol. 42(3-5), pages 459-490, May.
  23. Kahn, Lawrence M & Munighan, J Keith, 1993. "A General Experiment on Bargaining in Demand Games with Outside Options," American Economic Review, American Economic Association, vol. 83(5), pages 1260-80, December.
  24. Ken Binmore & Avner Shared & John Sutton, 1989. "An Outside Option Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 753-770.
  25. Gary E Bolton & Rami Zuwick, 2010. "Anonymity versus punishments in ultimatum bargaining," Levine's Working Paper Archive 826, David K. Levine.
  26. Sefton, Martin, 1992. "Incentives in simple bargaining games," Journal of Economic Psychology, Elsevier, vol. 13(2), pages 263-276, June.
  27. Ruffle, Bradley J., 1998. "More Is Better, But Fair Is Fair: Tipping in Dictator and Ultimatum Games," Games and Economic Behavior, Elsevier, vol. 23(2), pages 247-265, May.
  28. Simon Gaechter & Armin Falk, . "Reputation and Reciprocity: Consequences for the Labour Relation," IEW - Working Papers 019, Institute for Empirical Research in Economics - University of Zurich.
  29. Cooper, David J. & Stockman, Carol Kraker, 2002. "Fairness and learning: an experimental examination," Games and Economic Behavior, Elsevier, vol. 41(1), pages 26-45, October.
  30. Tilman Slembeck, 1999. "Low Information Games - Experimental Evidence on Learning in Ultimatum Bargaining," Experimental 9905001, EconWPA.
  31. Andreoni,J., 2000. "The economics of philanthropy," Working papers 2, Wisconsin Madison - Social Systems.
  32. Armantier, Olivier, 2004. "Does observation influence learning?," Games and Economic Behavior, Elsevier, vol. 46(2), pages 221-239, February.
  33. Neelin, Janet & Sonnenschein, Hugo & Spiegel, Matthew, 1988. "A Further Test of Noncooperative Bargaining Theory: Comment," American Economic Review, American Economic Association, vol. 78(4), pages 824-36, September.
  34. Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
  35. Starmer, Chris & Sugden, Robert, 1991. "Does the Random-Lottery Incentive System Elicit True Preferences? An Experimental Investigation," American Economic Review, American Economic Association, vol. 81(4), pages 971-78, September.
  36. Fershtman, Chaim & Gneezy, Uri & Verboven, Frank, 2002. "Discrimination and Nepotism: The Efficiency of the Anonymity Rule," CEPR Discussion Papers 3175, C.E.P.R. Discussion Papers.
  37. David Cooper & Nick Feltovich & Alvin Roth & Rami Zwick, 2003. "Relative versus Absolute Speed of Adjustment in Strategic Environments: Responder Behavior in Ultimatum Games," Experimental Economics, Springer, vol. 6(2), pages 181-207, October.
  38. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, vol. 66(3), pages 569-596, May.
  39. Stahl, Dale O., 2000. "Rule Learning in Symmetric Normal-Form Games: Theory and Evidence," Games and Economic Behavior, Elsevier, vol. 32(1), pages 105-138, July.
  40. Straub, Paul G. & Murnighan, J. Keith, 1995. "An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 345-364, August.
  41. Antonio Cabrales & Walter Garcia Fontes, 2000. "Estimating learning models from experimental data," Economics Working Papers 501, Department of Economics and Business, Universitat Pompeu Fabra.
  42. Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
  43. Eckel, Catherine C & Grossman, Philip J, 2001. "Chivalry and Solidarity in Ultimatum Games," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 171-88, April.
  44. Selten, Reinhard & Joachim Buchta, 1994. "Experimental Sealed Bid First Price Auctions with Directly Observed Bid Functions," Discussion Paper Serie B 270, University of Bonn, Germany.
  45. Murnighan, J. Keith & Saxon, Michael Scott, 1998. "Ultimatum bargaining by children and adults," Journal of Economic Psychology, Elsevier, vol. 19(4), pages 415-445, August.
  46. Ochs, Jack & Roth, Alvin E, 1989. "An Experimental Study of Sequential Bargaining," American Economic Review, American Economic Association, vol. 79(3), pages 355-84, June.
  47. Bolle, Friedel, 1990. "High reward experiments without high expenditure for the experimenter?," Journal of Economic Psychology, Elsevier, vol. 11(2), pages 157-167, June.
  48. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
  49. Fréchette, Guillaume R., 2009. "Learning in a multilateral bargaining experiment," Journal of Econometrics, Elsevier, vol. 153(2), pages 183-195, December.
  50. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer, vol. 1(2), pages 115-131, September.
  51. Eyal Winter & Shmuel Zamir, 2005. "An Experiment With Ultimatum Bargaining In A Changing Environment," The Japanese Economic Review, Japanese Economic Association, vol. 56(3), pages 363-385.
  52. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
  53. 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.
  54. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:47:y:2006:i:2:p:391-429. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.