Social Comparisons in Ultimatum Bargaining

16 Pages Posted: 8 Dec 2004

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)

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Abstract

Experiments are used to examine the effects of social comparisons in ultimatum bargaining. We inform responders about the average offer before they decide whether to accept or reject their specific offer. This significantly increases offers and offer-specific rejection probabilities. For comparison, we consider another change in informational conditions: telling responders the total pie is $30 - it was either $15 or $30 - affects offers and rejection probabilities roughly as much. Our results are consistent with people's dislike for deviations from the norm of equity but inconsistent with fairness theories, where people dislike income disparity between themselves and their referents.

Suggested Citation

Bohnet, Iris and Zeckhauser, Richard J., Social Comparisons in Ultimatum Bargaining. Available at SSRN: https://ssrn.com/abstract=623339

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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National Bureau of Economic Research (NBER) ( email )

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