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Interpersonal comparisons of utility in bargaining : Evidence from a transcontinental Ultimatum Game

Author

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  • Romina Boarini

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

  • Jean-François Laslier

    () (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

  • Stéphane Robin

    () (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper we present the results of a laboratory test of the "Transcontinental Ultimatum Game" implemented between India and France. The bargaining took the form of standard ultimatum games, but in one treatment Indian subjects made proposals to French subjects and in another treatment French subjects made proposals to Indian subjects. We observed that French->Indian bargaining mostly ended up with unequal splits of money in favour of French, while pretty equal splits were the most frequent outcome in Indian -> French interactions. The conceptual framework that we introduce to discuss the empirical evidence is a standard social reference norms model modified for taking into account the different marginal value of money of bargainers. Our explanation does not require the consideration of different cultural norms between France and India. It simply relies on relative standings comparisons between players, which occur in respect to the real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. Such norm is called local equity norm, and contrasted to a global equity norm which would encompasses 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, 2004. "Interpersonal comparisons of utility in bargaining : Evidence from a transcontinental Ultimatum Game," Working Papers hal-00242919, HAL.
  • Handle: RePEc:hal:wpaper:hal-00242919
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00242919
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    References listed on IDEAS

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    Cited by:

    1. repec:eme:ijsepp:ijse-01-2015-0008 is not listed on IDEAS
    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 Stevens, 2017. "Role of personality style on bargaining outcomes," International Journal of Social Economics, Emerald Group Publishing, vol. 44(9), pages 1166-1196, September.
    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; Comparaisons inter-personnelles d'utilité; Justice; Equité; Expérience de négociation; Jeu de l'ultimatum;

    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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