Third-Party Sanctioning and Compensation Behavior: Findings from the Ultimatum Game

Posted: 22 Oct 2012

See all articles by Alex K. Chavez

Alex K. Chavez

University of Michigan at Ann Arbor - Department of Psychology

Cristina Bicchieri

University of Pennsylvania

Date Written: October 22, 2012

Abstract

We measured the beliefs and behavior of third parties who were given the opportunity to add to or deduct from the payoffs of individuals who engaged in an economic bargaining game under different social contexts. Third parties rewarded bargaining outcomes that were equal and compensated victims of unfair bargaining outcomes rather than punishing perpetrators, but were willing to punish when compensation was not an available option. Beliefs of whether unequal bargaining outcomes were fair differed based on the normative context, but actual punishment, compensation, and rewarding behavior did not. This paper makes a novel contribution to the literature by comparing negative sanctions, positive sanctions, and compensation behavior by third parties.

Keywords: punishment, reward, compensation, social norms, ultimatum games, fairness

JEL Classification: A12, A13, B40, C91

Suggested Citation

Chavez, Alex K. and Bicchieri, Cristina, Third-Party Sanctioning and Compensation Behavior: Findings from the Ultimatum Game (October 22, 2012). Available at SSRN: https://ssrn.com/abstract=2165109

Alex K. Chavez (Contact Author)

University of Michigan at Ann Arbor - Department of Psychology ( email )

Ann Arbor, MI 48109
United States

Cristina Bicchieri

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States
215-898-5820 (Phone)

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