What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game

James Andreoni, Marco Castillo () and Ragan Petrie

American Economic Review, 2003, vol. 93, issue 3, 672-685

Abstract: The ultimatum game, by its all-or-nothing nature, makes it difficult to discern what kind of preferences may be generating choices. We explore a game that convexifies the decisions, allowing us a better look at the indifference curves of bargainers while maintaining the subgame-perfect equilibrium. We conclude that bargainers' preferences are convex and regular but not always monotonic. Money-maximization is the sole concern for about half of the subjects, while the other half reveal a preference for fairness. We also found, unexpectedly, the importance of risk aversion among money-maximizing proposers, which in turn generates significant bargaining power for fair-minded responders.

Date: 2003
Note: DOI: 10.1257/000282803322157034
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Citations: View citations in EconPapers (73)

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