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Interpersonal comparisons of utility in bargaining: evidence from a transcontinental ultimatum game

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  • Romina Boarini

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  • Jean-François Laslier

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  • Stéphane Robin

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Abstract

This paper presents the experimental results of a "Transcontinental Ultimatum Game" implemented between India and France. The bargaining took the form of standard ultimatum games, but in one treatment Indian subjects made offers to French subjects and, in another treatment, French subjects made offers to Indian subjects. We observed that French→Indian bargaining mostly ended up with unequal splits of money in favour of French, while nearly equal splits were the most frequent outcome in Indian→French interactions. The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.
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Suggested Citation

  • Romina Boarini & Jean-François Laslier & Stéphane Robin, 2009. "Interpersonal comparisons of utility in bargaining: evidence from a transcontinental ultimatum game," Theory and Decision, Springer, vol. 67(4), pages 341-373, October.
  • Handle: RePEc:kap:theord:v:67:y:2009:i:4:p:341-373
    DOI: 10.1007/s11238-009-9135-5
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    6. Bakhtiari, Fatemeh & Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark & Lundhede, Thomas Hedemark & Strange, Niels & Boman, Mattias, 2018. "Disentangling Distance and Country Effects on the Value of Conservation across National Borders," Ecological Economics, Elsevier, vol. 147(C), pages 11-20.

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    More about this item

    Keywords

    Interpersonal comparisons of utility; Fairness; Bargaining experiment; Ultimatum game; A15; C70; C91; D63;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • 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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