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Stakes matter in ultimatum games

  • John List
  • Moshe Hoffman
  • Seda Ertac
  • Steffen Andersen
  • Uri Gneezy

One of the most robust findings in experimental economics is that individuals in one-shot ultimatum games reject unfair offers. Puzzlingly, rejections have been found robust to substantial increases in stakes. By using a novel experimental design that elicits frequent low offers and uses much larger stakes than in the literature, we are able to examine stakes' effects over ranges of data that are heretofore unexplored. Our main result is that proportionally equivalent offers are less likely to be rejected with high stakes. In fact, our paper is the first to present evidence that as stakes increase, rejection rates approach zero.

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Paper provided by The Field Experiments Website in its series Framed Field Experiments with number 00118.

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Date of creation: 2011
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Handle: RePEc:feb:framed:00118
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  1. Todd L. Cherry & John A. List, 2004. "Examining the Role of Fairness in High Stakes Allocation Decisions," Working Papers 04-01, Department of Economics, Appalachian State University.
  2. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis," Experimental Economics, Springer, vol. 7(2), pages 171-188, 06.
  3. 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.
  4. Matthias Sutter, 2007. "Deception through telling the truth?! Experimental evidence from individuals and teams," Working Papers 2007-26, Faculty of Economics and Statistics, University of Innsbruck.
  5. John List & Moshe Hoffman & Seda Ertac & Steffen Andersen & Uri Gneezy, 2011. "Stakes matter in ultimatum games," Framed Field Experiments 00118, The Field Experiments Website.
  6. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
  7. Cameron, Lisa A, 1999. "Raising the Stakes in the Ultimatum Game: Experimental Evidence from Indonesia," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 47-59, January.
  8. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
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