Fairness in an Embedded Ultimatum Game

U. of Alabama Economics, Finance and Legal Studies Working Paper No. 04-11-01

32 Pages Posted: 15 Nov 2004

See all articles by Paul Pecorino

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Mark van Boening

University of Mississippi - Department of Economics

Date Written: November 2004

Abstract

We embed an ultimatum game in a stylized legal bargaining framework. This changes the framing of the standard ultimatum game in several ways, but also moves the bargaining closer to what is found in some naturally occurring settings. In this context, the ultimatum game is played over the joint surplus which is achieved from settlement as compared to a dispute. In our embedded ultimatum game, the median offer contains only 7% of the joint surplus from settlement. When we replicate the simple ultimatum game, we find that 50% of the joint surplus is contained in the median offer.

Keywords: Ultimatum Game, Experimental Bargaining, Civil Litigation

JEL Classification: C91, K41

Suggested Citation

Pecorino, Paul and van Boening, Mark, Fairness in an Embedded Ultimatum Game (November 2004). U. of Alabama Economics, Finance and Legal Studies Working Paper No. 04-11-01, Available at SSRN: https://ssrn.com/abstract=618743 or http://dx.doi.org/10.2139/ssrn.618743

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

Mark Van Boening

University of Mississippi - Department of Economics ( email )

371 Holman Hall
University, MS 38677
United States

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