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

  • Tilman Slembeck

    (University of St.Gallen)

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.

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Paper provided by EconWPA in its series Experimental with number 9905002.

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Length: 22 pages
Date of creation: 04 May 1999
Date of revision:
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
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  1. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
  2. Cooper, Russell & DeJong, Douglas V. & Forsythe, Robert & Ross, Thomas W., 1996. "Cooperation without Reputation: Experimental Evidence from Prisoner's Dilemma Games," Games and Economic Behavior, Elsevier, vol. 12(2), pages 187-218, February.
  3. Rosenthal, R W, 1979. "Sequences of Games with Varying Opponents," Econometrica, Econometric Society, vol. 47(6), pages 1353-66, November.
  4. James Andreoni & Rachel Croson, 2001. "Partners versus Strangers: Random Rematching in Public Goods Experiments," Levine's Working Paper Archive 563824000000000132, David K. Levine.
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  6. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-72, June.
  7. repec:att:wimass:9102 is not listed on IDEAS
  8. Andreoni, James A & Miller, John H, 1993. "Rational Cooperation in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence," Economic Journal, Royal Economic Society, vol. 103(418), pages 570-85, May.
  9. Mitzkewitz, Michael & Nagel, Rosemarie, 1993. "Experimental Results on Ultimatum Games with Incomplete Information," International Journal of Game Theory, Springer, vol. 22(2), pages 171-98.
  10. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
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  12. 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.
  13. Gary E Bolton & Rami Zuwick, 2010. "Anonymity versus punishments in ultimatum bargaining," Levine's Working Paper Archive 826, David K. Levine.
  14. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
  15. Ulrich Kamecke, 1997. "note: Rotations: Matching Schemes that Efficiently Preserve the Best Reply Structure of a One Shot Game," International Journal of Game Theory, Springer, vol. 26(3), pages 409-417.
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