1982 | Werner GÜTH, Rolf SCHMITTBERGER and Bernd SCHWARZE
This paper presents an experimental analysis of ultimatum bargaining games. The authors, Werner GÜTH, Rolf SCHMITTBERGER, and Bernd SCHWARZE, conducted experiments to investigate how individuals behave in ultimatum bargaining situations. Ultimatum bargaining games are characterized by a two-stage process where one player makes a decision that affects the other player's outcome. The key feature of these games is that the set of possible outcomes is narrowed down to two results before the final decision.
The study focuses on two types of games: "easy games" where a fixed amount of money is distributed between two players, and "complicated games" where players must divide a bundle of chips with different values for each player. The experiments revealed that subjects often deviate from the theoretically optimal strategy, particularly in complicated games. In easy games, subjects tended to accept offers that were close to the optimal solution, while in complicated games, they sometimes rejected offers that were not too extreme.
The authors found that subjects often consider fairness when making decisions, even if it means accepting a less optimal outcome. This suggests that the ultimatum aspect of these games is not always fully exploited by participants. The study also shows that experienced subjects are more likely to make decisions that align with the normative solution, indicating that strategic interaction in ultimatum bargaining games is primarily based on anticipating future decisions rather than simultaneous moves or infinite plays.
The results highlight the importance of understanding how individuals perceive fairness and how this influences their decision-making in bargaining situations. The study contributes to the broader understanding of strategic behavior in economic contexts and provides insights into how real-world bargaining behavior may differ from theoretical predictions.This paper presents an experimental analysis of ultimatum bargaining games. The authors, Werner GÜTH, Rolf SCHMITTBERGER, and Bernd SCHWARZE, conducted experiments to investigate how individuals behave in ultimatum bargaining situations. Ultimatum bargaining games are characterized by a two-stage process where one player makes a decision that affects the other player's outcome. The key feature of these games is that the set of possible outcomes is narrowed down to two results before the final decision.
The study focuses on two types of games: "easy games" where a fixed amount of money is distributed between two players, and "complicated games" where players must divide a bundle of chips with different values for each player. The experiments revealed that subjects often deviate from the theoretically optimal strategy, particularly in complicated games. In easy games, subjects tended to accept offers that were close to the optimal solution, while in complicated games, they sometimes rejected offers that were not too extreme.
The authors found that subjects often consider fairness when making decisions, even if it means accepting a less optimal outcome. This suggests that the ultimatum aspect of these games is not always fully exploited by participants. The study also shows that experienced subjects are more likely to make decisions that align with the normative solution, indicating that strategic interaction in ultimatum bargaining games is primarily based on anticipating future decisions rather than simultaneous moves or infinite plays.
The results highlight the importance of understanding how individuals perceive fairness and how this influences their decision-making in bargaining situations. The study contributes to the broader understanding of strategic behavior in economic contexts and provides insights into how real-world bargaining behavior may differ from theoretical predictions.