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Interpersonal comparisons of utility in bargaining: evidence from a transcontinental ultimatum game

Author

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  • Romina Boarini

    (OFCE - Observatoire Français des Conjonctures économiques - Institut d'Études Politiques [IEP] - Paris - Fondation Nationale des Sciences Politiques [FNSP])

  • Jean-François Laslier

    (Department of Economics, Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

  • Stéphane Robin

    () (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper presents the experimental results of a “Transcontinental Ultimatum Game” implemented between India and France. We use a standard ultimatum game, but in one treatment Indian subjects made offers to French subjects (ItoF treatment) and, in another treatment, French subjects made offers to Indian subjects (FtoI treatment). We observed that FtoI treatment bargaining mostly ended up with unequal splits of money in favor of French, while nearly equal splits were the most frequent outcome in ItoF treatment interactions. The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.

Suggested Citation

  • Romina Boarini & Jean-François Laslier & Stéphane Robin, 2009. "Interpersonal comparisons of utility in bargaining: evidence from a transcontinental ultimatum game," Post-Print halshs-00451566, HAL.
  • Handle: RePEc:hal:journl:halshs-00451566
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00451566
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    References listed on IDEAS

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    Cited by:

    1. Gari Walkowitz & Clemens Oberhammer & Heike Hennig-Schmidt, 2004. "Experimenting over a Long Distance - A method to facilitate intercultural experiments," Bonn Econ Discussion Papers bgse17_2004, University of Bonn, Germany, revised Dec 2005.
    2. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    3. Bryan C. McCannon & John B. Stevens, 2015. "Role of Personality Style on Bargaining Outcomes," Working Papers 15-22, Department of Economics, West Virginia University.
    4. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    5. repec:eee:ecolec:v:147:y:2018:i:c:p:11-20 is not listed on IDEAS

    More about this item

    Keywords

    Interpersonal Comparisons of Utility; Fairness; Bargaining experiment; Ultimatum Game;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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