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Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining

  • Heike Hennig-Schmidt
  • Zhu-Yu Li
  • Chaoliang Yang

When using the strategy method in ultimatum bargaining, many researchers ask responders for the minimal acceptable offer only implicitly assuming strategies to be monotone. Recent research has shown, however, that subjects decline disadvantageous and advantageous proposals. We report on an ultimatum game video experiment where more than 50 percent of the responders rejected advantageous offers. Proposers and responders acted together in groups of three people each and were video taped during decision making. The videotapes then were content analyzed. Our experimental design provides the unique opportunity to learn from participants’ spontaneous discussions about their motivations for rejecting advantageous offers. Main motives are social concern, non-expectancy of high offers, emotional, ethical, and moral reasons, group-specific decision rules and aversion against unpleasant numbers.

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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse22_2004.

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Length: 32
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:bon:bonedp:bgse22_2004
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
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