Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330261 
Year of Publication: 
2025
Series/Report no.: 
Helsinki GSE Discussion Papers No. 42
Publisher: 
Helsinki Graduate School of Economics, Helsinki
Abstract: 
Schelling (1956) first clarified how power to reduce one's freedom of choice might benefit a bargaining party. A commitment to reject proposals, when successful, may force concessions from opponents who otherwise might have an upper hand. This paper experimentally studies credible commitments prior to a sequential ultimatum bargaining game. We find that pre-emptive commitment strategies are exploited by the responders but less than predicted by theory. In a game where a responder can unilaterally precommit, she faces the same incentives as a proposer in an ultimatum game. Yet, the observed responder commitments are less aggressive than proposals by proposers in the ultimatum game. In a simultaneous commitment game, proposers who cannot benefit from committing are nevertheless observed to commit. The observed within-treatment payoff-differences between the two parties do not comply with the theoretical predictions in the commitment variants of the game. Surprisingly in late rounds, allowing for pre-commitment yields almost 100% efficiency both when only responders and when also the proposers are allowed to commit although the ultimatum game features significant inefficiencies even in late rounds. We discuss four complementary behavioral explanations and find that reciprocity and concern for equality of opportunity are consistent with the observed patterns. Empirically, we observe that ethical criteria underlying preferences for equal opportunity are at work.
Subjects: 
bargaining
precommitment
reciprocity
equality of opportunity
moral judgment
JEL: 
D74
C91
D02
D63
D91
ISBN: 
978-952-7543-41-2
Document Type: 
Working Paper

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