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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
Contact details of provider: Web page: http://www.fieldexperiments.com

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  1. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  2. 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.
  3. Lisa Cameron, 1995. "Raising the Stakes in the Ultimatum Game: Experimental Evidence From Indonesia," Working Papers 724, Princeton University, Department of Economics, Industrial Relations Section..
  4. Andersen, Steffen & Ertaç, Seda & Gneezy, Uri & Hoffman , Moshe & List, John A., 2011. "Stakes Matter in Ultimatum Games," Working Papers 01-2011, Copenhagen Business School, Department of Economics.
  5. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
  6. Matthias Sutter, 2009. "Deception Through Telling the Truth?! Experimental Evidence From Individuals and Teams," Economic Journal, Royal Economic Society, vol. 119(534), pages 47-60, 01.
  7. List, John A. & Cherry, Todd L., 2008. "Examining the role of fairness in high stakes allocation decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 65(1), pages 1-8, January.
  8. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural differences in ultimatum game experiments: Evidence from a meta-analysis," Experimental 0401003, EconWPA.
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