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Participation costs for responders can reduce rejection rates in ultimatum bargaining

  • Philipp C. Wichardt
  • Daniel Schunk
  • Patrick W. Schmitz

This paper reports data from an ultimatum mini-game in which responders first had to choose whether or not to participate. Participation was costly, but the participation cost was smaller than the minimum payoff that a responder could guarantee himself in the ultimatum game. Compared to a standard treatment, we find that the rejection rate of unfavorable offers is significantly reduced when participation is costly. A possible explanation based on cognitive dissonance is offered.

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Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 398.

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Date of creation: Dec 2008
Date of revision:
Handle: RePEc:zur:iewwpx:398
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