IDEAS home Printed from https://ideas.repec.org/p/chu/wpaper/13-17.html

Short- and Long-run Goals in Ultimatum Bargaining

Author

Listed:
  • Antonio M. Espín

    (GLOBE, Departamento de Teoría e Historia Económica, Universidad de Granada)

  • Filippos Exadaktylos

    (BELIS, Murat Sertel Center for Advanced Economic Studies, Istanbul Bilgi University)

  • Benedikt Herrmann

    (Institute for Health and Consumer Protection, Joint Research Centre, European Commission)

  • Pablo Brañas-Garza

    (Economic Science Institute, and Department of Economics and International Development, Middlesex University Business School)

Abstract

The ultimatum game (UG) is widely used to study human bargaining behavior and fairness norms. In this game, two players have to agree on how to split a sum of money. The proposer makes an offer, which the responder can accept or reject. If the responder rejects, neither player gets anything. The prevailing view is that, beyond self-interest, the desire to equalize both players’ payoffs (i.e., fairness) is the crucial motivation in the UG. Based on this view, previous research suggests that responders follow short-run psychological incentives when imposing fairness through the rejection of low offers. However, competitive spite, which reflects the desire to reduce others’ payoffs, can also account for the behavior observed in the UG, and has been linked to short-run, present-oriented aspirations as well. In this paper, we explore the relationship between individuals’ inter-temporal preferences and their behavior in a large-scale dual-role UG experiment. We find that impatience (present orientation) predicts the rejection of low, “unfair” offers as responders and the proposal of low, “unfair” offers as proposers, which is consistent with spite but inconsistent with fairness motivations. This behavior systematically reduces the payoffs of those who interact with impatient individuals. Thus, impatient individuals appear to be keen on reducing their partners’ share of the pie, even at the risk of destroying it. These findings indicate that competitive spite, rather than fairness, is the short-run motivation in ultimatum bargaining.

Suggested Citation

  • Antonio M. Espín & Filippos Exadaktylos & Benedikt Herrmann & Pablo Brañas-Garza, 2013. "Short- and Long-run Goals in Ultimatum Bargaining," Working Papers 13-17, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:13-17
    as

    Download full text from publisher

    File URL: http://www.chapman.edu/research-and-institutions/economic-science-institute/_files/WorkingPapers/branas-garza-short-and-long-run-goals.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jaime Iranzo & Luis M Floría & Yamir Moreno & Angel Sánchez, 2012. "Empathy Emerges Spontaneously in the Ultimatum Game: Small Groups and Networks," PLOS ONE, Public Library of Science, vol. 7(9), pages 1-8, September.
    2. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
    3. Filippos Exadaktylos & Antonio M. Espin & Pablo Branas-Garza, 2012. "Experimental Subjects are Not Different," Working Papers 12-11, Chapman University, Economic Science Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valerio Capraro & Brice Corgnet & Antonio M. Espin & Roberto Hernan-Gonzalez, 2016. "Deliberation favors social efficiency by helping people disregard their relative shares: Evidence from US and India," Discussion Papers 2016-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Neuman, Shoshana & Brañas-Garza, Pablo & Espin, Antonio M., 2013. "Effects of religiosity on social behaviour: Experimental evidence from a representative sample of Spaniards," CEPR Discussion Papers 9709, C.E.P.R. Discussion Papers.
    3. Antonio M. Espín & Dolores Moreno-Herrero & José Sánchez-Campillo & José A. Rodríguez Martín, 2018. "Do Envy and Compassion Pave the Way to Unhappiness? Social Preferences and Life Satisfaction in a Spanish City," Journal of Happiness Studies, Springer, vol. 19(2), pages 443-469, February.
    4. Jesús Martín & Pablo Brañas-Garza & Antonio M. Espín & Juan F. Gamella & Benedikt Herrmann, 2018. "The appropriate response of Spanish Gitanos: Short-run orientation beyond current socio-economic status," SEET Working Papers 2018-01, BELIS, Istanbul Bilgi University.
    5. Rassenti, Stephen & Espin, Antonio M. & Kujal, Praveen, 2017. "Humans’ (incorrect) distrust of reflective decisions," CEPR Discussion Papers 11949, C.E.P.R. Discussion Papers.
    6. Antonio M. Espin & Angel Sanchez & Benedikt Herrmann, 2017. "Economic preferences 2.0: Connecting competition, cooperation and inter-temporal preferences," Discussion Papers 2017-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    7. Brice Corgnet & Antonio M. Espin & Roberto Hernán-González, 2015. "The cognitive basis of social behavior : cognitive reflection overrides antisocial but not always prosocial motives," Post-Print hal-02311954, HAL.
    8. Brañas-Garza, Pablo & Chowdhury, Subhasish M. & Espín, Antonio M. & Nieboer, Jeroen, 2023. "‘Born this Way’? Prenatal exposure to testosterone may determine behavior in competition and conflict," Journal of Economic Psychology, Elsevier, vol. 96(C).
    9. Brañas-Garza, Pablo & Espín, Antonio M. & Lenkei, Balint, 2015. "BMI is not related to altruism, fairness, trust or reciprocity: Experimental evidence from the field and the lab," MPRA Paper 68184, University Library of Munich, Germany.
    10. Shanshan Zhen & Rongjun Yu, 2016. "Tend to Compare and Tend to Be Fair: The Relationship between Social Comparison Sensitivity and Justice Sensitivity," PLOS ONE, Public Library of Science, vol. 11(5), pages 1-17, May.
    11. Antonio Cabrales & Antonio M. Espín & Praveen Kujal & Stephen Rassenti, 2017. "Humans’ (incorrect) distrust of reflective decisions," Working Papers 17-05, Chapman University, Economic Science Institute.
    12. Espín, Antonio M. & Brañas-Garza, Pablo & Gamella, Juan & Herrmann, Benedikt & Martin, Jesus, 2019. "Bringing together “old” and “new” ways of solving social dilemmas? The case of Spanish Gitanos," MPRA Paper 95423, University Library of Munich, Germany.
    13. Espín, Antonio M. & Correa, Manuel & Ruiz-Villaverde, Alberto, 2019. "Patience predicts cooperative synergy: The roles of ingroup bias and reciprocity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    14. Yanling Zhang & Feng Fu, 2018. "Strategy intervention for the evolution of fairness," PLOS ONE, Public Library of Science, vol. 13(5), pages 1-13, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pablo Brañas-Garza & Diego Jorrat & Antonio M. Espín & Angel Sánchez, 2023. "Paid and hypothetical time preferences are the same: lab, field and online evidence," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 412-434, April.
    2. David Patiño & Francisco Gómez-García, 2019. "Do Quasi-Hyperbolic Preferences Explain Academic Procrastination? An Empirical Evaluation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 230(3), pages 95-124, June.
    3. Azzurra Morreale & Luigi Mittone & Thi-Thanh-Tam Vu & Mikael Collan, 2020. "To Wait or Not to Wait? Use of the Flexibility to Postpone Investment Decisions in Theory and in Practice," Sustainability, MDPI, vol. 12(8), pages 1-19, April.
    4. Nicholas Chesterley, 2017. "Defaults, Decision Costs and Welfare in Behavioural Policy Design," Economica, London School of Economics and Political Science, vol. 84(333), pages 16-33, January.
    5. Tim Kaiser & Lukas Menkhoff & Luis Oberrauch, 2022. "Is Patience Malleable via Educational Intervention? Evidence from Field Experiments," CESifo Working Paper Series 10080, CESifo.
    6. Liu, Bo & Niu, Yingjie & Zhang, Yuhua, 2019. "Corporate liquidity and risk management with time-inconsistent preferences," Economic Modelling, Elsevier, vol. 81(C), pages 295-307.
    7. Leonhard K. Lades & Liam Delaney, 2024. "Self-control failures, as judged by themselves," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    8. Abi Adams & Laurens Cherchye & Bram De Rock & Ewout Verriest, 2014. "Consume Now or Later? Time Inconsistency, Collective Choice, and Revealed Preference," American Economic Review, American Economic Association, vol. 104(12), pages 4147-4183, December.
    9. Kemptner, Daniel & Tolan, Songül, 2018. "The role of time preferences in educational decision making," Economics of Education Review, Elsevier, vol. 67(C), pages 25-39.
    10. Xavier Giné & Jessica Goldberg & Dan Silverman & Dean Yang, 2018. "Revising Commitments: Field Evidence on the Adjustment of Prior Choices," Economic Journal, Royal Economic Society, vol. 128(608), pages 159-188, February.
    11. Lillemo, Shuling Chen, 2014. "Measuring the effect of procrastination and environmental awareness on households' energy-saving behaviours: An empirical approach," Energy Policy, Elsevier, vol. 66(C), pages 249-256.
    12. Mary Zaki, 2016. "Access to Short-term Credit and Consumption Smoothing within the Paycycle," Working Papers 2016.07, Fondazione Eni Enrico Mattei.
    13. Tasoff, Joshua & Letzler, Robert, 2014. "Everyone believes in redemption: Nudges and overoptimism in costly task completion," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 107-122.
    14. Shinsuke Ikeda & Myong-Il Kang, 2015. "Hyperbolic Discounting, Borrowing Aversion and Debt Holding," The Japanese Economic Review, Japanese Economic Association, vol. 66(4), pages 421-446, December.
    15. Jan (J.B.) Engelmann & Basil Schmid & Justin Chumbley & Ernst Fehr, 2018. "The Dark Side of Personality: Anti-Sociality Increases Strategic Game Play," Tinbergen Institute Discussion Papers 18-010/I, Tinbergen Institute.
    16. John Y. Campbell, 2016. "Restoring Rational Choice: The Challenge of Consumer Financial Regulation," American Economic Review, American Economic Association, vol. 106(5), pages 1-30, May.
    17. Goda, Gopi Shah & Levy, Matthew R. & Manchester, Colleen Flaherty & Sojourner, Aaron & Tasoff, Joshua, 2020. "Who is a passive saver under opt-in and auto-enrollment?," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 301-321.
    18. Hinnosaar, Marit, 2016. "Time inconsistency and alcohol sales restrictions," European Economic Review, Elsevier, vol. 87(C), pages 108-131.
    19. Jean-Pierre Drugeon & Thai Ha-Huy, 2023. "An $\alpha$-MaxMin Utility Representation for Close and Distant Future Preferences with Temporal Biases," Working Papers hal-04010969, HAL.
    20. Brad Humphreys & Jane Ruseski & Li Zhou, 2015. "Physical Activity, Present Bias, and Habit Formation: Theory and Evidence from Longitudinal Data," Working Papers 2015-06, University of Alberta, Department of Economics.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chu:wpaper:13-17. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Megan Luetje (email available below). General contact details of provider: https://edirc.repec.org/data/esichus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.