Social Comparisons in Ultimatum Bargaining

21 Pages Posted: 28 May 2003

See all articles by Iris Bohnet

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2003

Abstract

This paper experimentally examines the effect of social comparisons in ultimatum bargaining. While previous experiments and the theoretical models on fairness focus on the two bargaining counterparts, we address a new reference group - others in like circumstances. We inform responders on how much other responders are offered before they decide whether to accept or reject their specific offer. Such information has a sizable positive effect on offers, rejection and equal split rates. This result is consistent with people disliking deviations from the norm of equity but inconsistent with fairness theories, where people dislike income disparity between themselves and their referents.

Keywords: Fairness, social comparisons, information

JEL Classification: C91

Suggested Citation

Bohnet, Iris and Zeckhauser, Richard J., Social Comparisons in Ultimatum Bargaining (June 2003). Available at SSRN: https://ssrn.com/abstract=334100 or http://dx.doi.org/10.2139/ssrn.334100

Iris Bohnet (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

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Cambridge, MA 02138
United States
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National Bureau of Economic Research (NBER) ( email )

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