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Are Behavioral Choices in the Ultimatum and Investment Games Strategic?

Author

Listed:
  • Lora R. Todorova

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Bodo Vogt

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

This paper experimentally examines the relationship between self-reporting risk preferences and behavioral choices in the subsequently played dictator, ultimatum and investment games. The results from these experiments are used to discern the motivational bases of behavioral choices in the ultimatum and investment games. The focus is on investigating whether strategic considerations are important for strategy selection in the two games. We find that self-reporting risk preferences does not alter the dictators' offers and trusters' investments, while it significantly decreases the proposers' offers and leads to a substantial decrease in the amount trustees give back to their partners. We interpret these results as evidence that the decisions of proposers in the ultimatum game and trustees in the investment game are strategic.

Suggested Citation

  • Lora R. Todorova & Bodo Vogt, 2012. "Are Behavioral Choices in the Ultimatum and Investment Games Strategic?," FEMM Working Papers 120021, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:120021
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    References listed on IDEAS

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    More about this item

    Keywords

    coordination game; dictator game; ultimatum game; investment game; questionnaire; risk scale; risk preferences;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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