Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90046
Authors: 
Hennig-Schmidt, Heike
Irlenbusch, Bernd
Rilke, Rainer Michael
Walkowitz, Gari
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7625
Abstract: 
We experimentally investigate multiple notions of equity in ultimatum bargaining with asymmetric outside options. Building on the generalized equity principle formulated by Selten (1978), we derive three different equity rules that can explain 43% of all offers. Our within-subject design further allows us to show that proposers use different equity rules and apply them in a self-serving manner. They tend to follow the rules that suggest the highest payoff for them. Responders exhibit a similar pattern of behavior. Combined, these tendencies lead to high inefficiencies due to frequent rejections.
Subjects: 
Outside Options
Equity Principle
Ultimatum Game
JEL: 
C71
C72
C78
C91
D63
Document Type: 
Working Paper

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