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Revealing preferences for fairness in ultimatum bargaining

  • Andreoni,J.
  • Castillo,M.
  • Petrie,R.

    (University of Wisconsin-Madison, Social Systems Research Institute)

The ultimatum game has been the primary tool for studying bar-gaining behavior in recent years. However, not enough information is gathered in the ultimatum game to get a clear picture of responders¡¯ utility functions. We analyze a convex ultimatum game in which responders¡¯ can ¡°shrink¡± an offer as well as to accept or reject it. This allows us to observe enough about responders¡¯ preferences to estimate utility functions. We use data collected from convex ultimatum games to successfully predict behavior in standard games. Rejections can be ¡°rationalized¡± with neo-classical preferences over own- and other-payoff that are convex, nonmonotonic, and regular.

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Paper provided by Wisconsin Madison - Social Systems in its series Working papers with number 13.

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Date of creation: 2004
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Handle: RePEc:att:wimass:200413
Contact details of provider: Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.

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