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Investment and Ultimatum Games: Experiments

Author

Listed:
  • Hitoshi Matsushima

    (Faculty of Economics, University of Tokyo)

  • Toshihiko Shima

    (Graduate School of Economics, University of Tokyo)

Abstract

This paper examines the ultimatum game preceded by a single player's investment decision that is risky in that the business opportunity could fail to be discovered. The experiment's results show that the functioning of social preference connecting the baseline ultimatum game with the investment crucially depends on the model's specifications, such as whether the proposer or the responder is the investor or the riskiness of the investment. The noninvestor/proposer tends to act in consideration of the efficiency of the investment, but not its riskiness. Such tendencies of the noninvestor's/proposer's social preferences are diametrically opposite to that of the investor/proposer.

Suggested Citation

  • Hitoshi Matsushima & Toshihiko Shima, 2011. "Investment and Ultimatum Games: Experiments," CARF F-Series CARF-F-244, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    • Handle: RePEc:cfi:fseres:cf244
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    References listed on IDEAS

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