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I want to know: Willingness to pay for unconditional veto power

Author

Listed:
  • Werner Güth

    ()

  • René Levínský
  • Tobias Uske

    ()

  • Thomas Gehrig

Abstract

In the Yes/No game, like in the ultimatum game, proposer and responder can share a monetary reward. In both games the proposer suggests a reward distribution which the responder can accept or reject (yielding 0-payoffs). The games only differ in that the responder does (not) learn the suggested reward distribution in the Ultimatum (Yes/No) game. Although an opportunistic responder would always accept and therefore should not be willing to pay for knowing the proposal, earlier results (Güth, Levati, Ockenfels, and Weiland, 2005) show that offers in the Yes/No game are less generous and that responders, on average, earn less in the Yes/No game. By experimentally eliciting the willingness to pay for learning the proposal, we investigate whether these effects are adequately anticipated or whether they are overstated, as observed in an earlier related study (Gehrig, Güth, Levinsky, 2003).

Suggested Citation

  • Werner Güth & René Levínský & Tobias Uske & Thomas Gehrig, 2006. "I want to know: Willingness to pay for unconditional veto power," Papers on Strategic Interaction 2006-21, Max Planck Institute of Economics, Strategic Interaction Group.
  • Handle: RePEc:esi:discus:2006-21
    as

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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2006-21.pdf
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    3. Werner Güth & Carsten Schmidt & Matthias Sutter, 2007. "Bargaining outside the lab - a newspaper experiment of a three-person ultimatum game," Economic Journal, Royal Economic Society, vol. 117(518), pages 449-469, March.
    4. Gehrig, Thomas & Guth, Werner & Levati, Vittoria & Levinsky, Rene & Ockenfels, Axel & Uske, Tobias & Weiland, Torsten, 2007. "Buying a pig in a poke: An experimental study of unconditional veto power," Journal of Economic Psychology, Elsevier, vol. 28(6), pages 692-703, December.
    5. Sayman, Serdar & Onculer, Ayse, 2005. "Effects of study design characteristics on the WTA-WTP disparity: A meta analytical framework," Journal of Economic Psychology, Elsevier, vol. 26(2), pages 289-312, April.
    6. Thomas Gehrig & Werner Güth & René Levínský, 2003. "Ultimatum Offers and the Role of Transparency: An Experimental Study of Information Acquisition," Papers on Strategic Interaction 2003-16, Max Planck Institute of Economics, Strategic Interaction Group.
    7. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    8. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    9. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Information acquisition; Endowment effect; Veto power; Anticipation; Decision strategy;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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