Ultimatum Games and Wages: Evidence of an 'Implicit Bargain'?

Schmalenbach Business Review, Vol. 55, April 2003

Posted: 2 Jun 2003

See all articles by Kerstin Pull

Kerstin Pull

University of Tuebingen - School of Business and Economics

Abstract

In this paper, I argue that both ultimatum game outcomes and wages may be influenced by what the result of a bargain would have been: The players in the ultimatum game, just as the parties to the labor contract, seem to engage in what may be called an "implicit" or, in Selten's words, an "imaginary" bargain. In determining ultimatum game outcomes, assuming an implicit bargain can account for the experimental evidence on the role of responder bargaining power. Moreover, the implications of the implicit bargain for the wage setting process are compatible with the stylized facts of wage determination.

Keywords: Ultimatum Game, Wage Determination, Nash Bargain

JEL Classification: J31, M12

Suggested Citation

Pull, Kerstin, Ultimatum Games and Wages: Evidence of an 'Implicit Bargain'?. Schmalenbach Business Review, Vol. 55, April 2003. Available at SSRN: https://ssrn.com/abstract=406480

Kerstin Pull (Contact Author)

University of Tuebingen - School of Business and Economics ( email )

Nauklerstr. 47
Tuebingen, D-72074
Germany

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