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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
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Information acquisition; Endowment effect; Veto power; Anticipation; Decision strategy;
    All these keywords.

    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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