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Reputations and Fairness in Bargaining - Experimental Evidence from a Repeated Ultimatum Game With Fixed Opponents

Author

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  • Tilman Slembeck

    (University of St.Gallen)

Abstract

The results of Ultimatum Game experiments are often quoted as evidence for the role of fairness in bargaining or in economic behaviour more generally. This paper argues that the observed fairness levels are contingent on the traditional experimental design where players are newly matched each round, and reputations are therefore excluded. Evidence from a new experiment shows that average behaviour is more competitive and conflict rates are higher when subjects play against the same opponent repeatedly. This finding is not expected by the traditional fairness hypothesis. A detailed analysis of the dynamics of pairs of players shows that different types of players coexist in the subject pool. Whereas previous experiments found evidence for the existence of "fair" players, the present study reports also a significant number of "tough" players. Hence, there is evidence that allowing for reputations in repeated ultimatum bargaining induces different patterns of behaviour that have not been observed before in this game.

Suggested Citation

  • Tilman Slembeck, 1999. "Reputations and Fairness in Bargaining - Experimental Evidence from a Repeated Ultimatum Game With Fixed Opponents," Experimental 9905002, EconWPA.
  • Handle: RePEc:wpa:wuwpex:9905002
    Note: Type of Document - PDF-File; prepared on IBM PC; to print on HP/PostScript/; pages: 22 ; figures: included. Discussion Paper No. 9904, Department of Economics, University of St.Gallen, March 1999, downloads http://www.fgn.unisg.ch/public/public.htm
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/exp/papers/9905/9905002.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Wu, Diana Yan, 2013. "The impact of repeated interactions on supply chain contracts: A laboratory study," International Journal of Production Economics, Elsevier, vol. 142(1), pages 3-15.
    2. Riedl Arno & Exelle Ben D, 2008. "Elite Capture, Political Voice and Exclusion from Aid: An Experimental Study," Research Memorandum 024, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Werner G³th, 2001. "How Ultimatum Offers Emerge: A Study in Bounded Rationality," Homo Oeconomicus, Institute of SocioEconomics, vol. 18, pages 91-110.
    4. Avrahami, Judith & Güth, Werner & Hertwig, Ralph & Kareev, Yaakov & Otsubo, Hironori, 2013. "Learning (not) to yield: An experimental study of evolving ultimatum game behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 47-54.
    5. Davis, Douglas D. & Wilson, Bart J., 2008. "Strategic buyers, horizontal mergers and synergies: An experimental investigation," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 643-661, May.
    6. Tilman Slembeck, 2000. "Learning in Economics: Where Do We Stand?," Microeconomics 0004007, EconWPA.
    7. Jason Shachat & J. Todd Swarthout, 2013. "Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection," Games, MDPI, Open Access Journal, vol. 4(4), pages 1-16, November.
    8. Tilman Slembeck, 1999. "A Behavioral Approach to Learning in Economics - Towards an Economic Theory of Contingent Learning," Microeconomics 9905001, EconWPA.
    9. Ben D'Exelle & Els Lecoutere & Bjorn Van Campenhout, 2010. "Social status and bargaining when resources are scarce: Evidence from a field lab experiment," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 10-09, School of Economics, University of East Anglia, Norwich, UK..
    10. Arshad Ali Javed & Patrick T.I. Lam & Albert P.C. Chan, 2014. "Change negotiation in public-private partnership projects through output specifications: an experimental approach based on game theory," Construction Management and Economics, Taylor & Francis Journals, vol. 32(4), pages 323-348, April.
    11. Chen, Daniel L. & Schonger, Martin, 2016. "A Theory of Experiments: Invariance of Equilibrium to the Strategy Method of Elicitation and Implications for Social Preferences," IAST Working Papers 16-54, Institute for Advanced Study in Toulouse (IAST).
    12. Tilman Slembeck, 1999. "Low Information Games - Experimental Evidence on Learning in Ultimatum Bargaining," Experimental 9905001, EconWPA.
    13. repec:eee:eecrev:v:100:y:2017:i:c:p:175-192 is not listed on IDEAS

    More about this item

    Keywords

    game theory; experiments; learning; fairness; reputations; ultimatum game;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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