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Group Decision-Making in Ultimatum Bargaining: An Experimental Study

  • Alexander Elbittar

    ()

    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

  • Andrei Gomberg

    ()

    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

  • Laura Sour

    ()

    (Centro de Investigacion y Docencia Economicas)

Many rent-sharing decisions in a society are result from a bargaining process between groups of individuals (such as between the executive and the legislative branches of government, between legislative factions, between corporate management and shareholders, etc.). The purpose of this work is to conduct a laboratory study of the effect of different voting procedures on group decision-making in the context of ultimatum bargaining. An earlier study (Bornstein and Yaniv, [2]) has suggested that when the bargaining game is played by unstructured groups of agents, rather than by individuals, the division of the payoff is substantially affected in favor of the ultimatum-proposers. Our theoretical arguments suggest that one explanation for this could be implicit voting rules within groups. We propose to explicitly structure the group decision-making as voting and study the impact of different voting rules on the bargaining outcome.

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File URL: http://ftp.itam.mx/pub/academico/inves/gomberg/04-07.pdf
File Function: First version, 2004
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Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 0407.

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Length: 36 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:cie:wpaper:0407
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  1. Matthew Rabin., 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Economics Working Papers E00-279, University of California at Berkeley.
  2. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  3. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  4. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  5. Cason, Timothy N & Mui, Vai-Lam, 1997. "A Laboratory Study of Group Polarisation in the Team Dictator Game," Economic Journal, Royal Economic Society, vol. 107(444), pages 1465-83, September.
  6. Gary Bornstein & Ilan Yaniv, 1998. "Individual and Group Behavior in the Ultimatum Game: Are Groups More “Rational†Players?," Experimental Economics, Springer, vol. 1(1), pages 101-108, June.
  7. J. Ochs & Alvin E. Roth, 1998. "An experimental study of sequential bargaining," Levine's Working Paper Archive 331, David K. Levine.
  8. Messick, David M. & Moore, Don A. & Bazerman, Max H., 1997. "Ultimatum Bargaining with a Group: Underestimating the Importance of the Decision Rule," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(2), pages 87-101, February.
  9. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, vol. 66(3), pages 569-596, May.
  10. V. Prasnikar & A. Roth, 1998. "Considerations of fairness and strategy: experimental data from sequential games," Levine's Working Paper Archive 451, David K. Levine.
  11. David K Levine, 1997. "Modeling Altruism and Spitefulness in Experiments," Levine's Working Paper Archive 2047, David K. Levine.
  12. Brit Grosskopf, 2003. "Reinforcement and Directional Learning in the Ultimatum Game with Responder Competition," Experimental Economics, Springer, vol. 6(2), pages 141-158, October.
  13. Gary Bornstein & Tamar Kugler & Anthony Ziegelmeyer, 2002. "Individual and Group Decisions in the Centipede Game: Are Groups More “Rational” Players?," Discussion Paper Series dp298, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  14. Joseph Henrich, 2000. "Does Culture Matter in Economic Behavior? Ultimatum Game Bargaining among the Machiguenga of the Peruvian Amazon," American Economic Review, American Economic Association, vol. 90(4), pages 973-979, September.
  15. Martin Kocher & Matthias Sutter, 2007. "Individual versus group behavior and the role of the decision making procedure in gift-exchange experiments," Empirica, Springer, vol. 34(1), pages 63-88, March.
  16. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
  17. Ronald Bosman & Heike Hennig-Schmidt & Frans vanWinden, 2002. "Exploring Group Behavior in a Power-to-Take Video Experiment," Bonn Econ Discussion Papers bgse7_2002, University of Bonn, Germany, revised May 2002.
  18. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
  19. Robert, Christopher & Carnevale, Peter J., 1997. "Group Choice in Ultimatum Bargaining," Organizational Behavior and Human Decision Processes, Elsevier, vol. 72(2), pages 256-279, November.
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