On the Behavior of Proposers in Ultimatum Games

Brenner, Thomas; Vriend, Nicolaas J.

doi:10.2139/ssrn.456980

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On the Behavior of Proposers in Ultimatum Games

Queen Mary, University of London Economics Working Paper No. 502

22 Pages Posted: 20 Oct 2003

See all articles by Thomas Brenner

Thomas Brenner

Max Planck Institute for Research Into Economic Systems, Jena

Nicolaas J. Vriend

Queen Mary, University of London - Department of Economics

Date Written: October 2003

Abstract

We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show experimentally that proposers do not learn to make the expected-payoff-maximizing offer. Second, considering a range of learning theories (from optimal to boundedly rational), we explain that this is an inherent feature of the learning task faced by the proposers, and we provide some insights into the actual learning behavior of the experimental subjects. This explanation for the lack of convergence to the subgame perfect Nash equilibrium in ultimatum games complements most alternative explanations.

JEL Classification: C72, C91, D81, D83

Suggested Citation: Suggested Citation

Brenner, Thomas and Vriend, Nicolaas J., On the Behavior of Proposers in Ultimatum Games (October 2003). Queen Mary, University of London Economics Working Paper No. 502, Available at SSRN: https://ssrn.com/abstract=456980 or http://dx.doi.org/10.2139/ssrn.456980