Social Preferences, Efficiency and Personal Values in Ultimatum Bargaining

12 Pages Posted: 28 Mar 2013

See all articles by Jan-Erik Lönnqvist

Jan-Erik Lönnqvist

University of Helsinki - Department of Psychology

Markku Verkasalo

University of Helsinki

Gari Walkowitz

Technische Universität München (TUM) - School of Governance - Hochschule für Politik

Philipp C. Wichardt

University of Rostock - Department of Economics

Date Written: March 27, 2013

Abstract

How do people trade off efficiency against equality concerns? To study this question, we conducted a modified mini ultimatum game (N=120) in which proposers were asked to choose between offering 8:2 and y:y, y∈{5, 4.5, 4,.., 0.5}; all offers in Euro. According to the data, 58 of 60 proposers have a unique switching point towards the unequal split and the majority of switching occurs between 3.5:3.5 and 2:2. Regarding the variance of the switching, we find that subjects with a comparably high interest in control over resources (higher Power values) tend to switch earlier. Moreover, after reversing roles, subjects who have previously been responders show a far stronger inclination to stick to the equal split indicating that knowing how it is to be in the other's shoes increases other-regarding behaviour.

Keywords: Ultimatum Game, Social Preferences, Personal Values

JEL Classification: C91, D63, Z00

Suggested Citation

Lönnqvist, Jan-Erik and Verkasalo, Markku and Walkowitz, Gari and Wichardt, Philipp C., Social Preferences, Efficiency and Personal Values in Ultimatum Bargaining (March 27, 2013). Available at SSRN: https://ssrn.com/abstract=2240366 or http://dx.doi.org/10.2139/ssrn.2240366

Jan-Erik Lönnqvist

University of Helsinki - Department of Psychology ( email )

Meritullinkatu 1
Helsinki 00014
Finland

Markku Verkasalo

University of Helsinki ( email )

University of Helsinki
Helsinki, FIN-00014
Finland

Gari Walkowitz

Technische Universität München (TUM) - School of Governance - Hochschule für Politik ( email )

Richard-Wagner-Str.1
Munich, 80333
Germany

Philipp C. Wichardt (Contact Author)

University of Rostock - Department of Economics ( email )

Ulmenstr. 69
Rostock, 18057
Germany

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