Participation costs for responders can reduce rejection rates in ultimatum bargaining

Abstract

Department of Economics, University of Cologne, GermanyAbstract. This paper reports data from an ultimatum mini-game in which responders first had to choose whether or not to participate. Participation was costly, but the participation cost was smaller than the minimum payoff that a responder could guarantee himself in the ultimatum game. Compared to a standard treatment, we find that the rejection rate of unfavorable offers is significantly reduced when participation is costly. A possible explanation based on cognitive dissonance is offered.

More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature

“…Although the ultimatum game is asymmetric by nature, one can further increase or decrease asymmetry by introducing asymmetry in conflict payoffs, outside options to be chosen or waved before playing the game, and asymmetries in information and communication possibilities Falk et al, 2003;Schmitt, 2004;Wichardt et al, 2009;Conrads and Irlenbusch, 2013). Naturally, such asymmetries favor those who are advantaged and disfavor the players in the disadvantaged role.…”

Gender Effects in Dictator Game Giving: Women Favour Female Recipients

“…In fact, this appears to be particularly relevant once we have in mind the literature on cognitive dissonance (e.g. Festinger, 1957;Harmon-Jones and Mills, 1999; see also Wichardt, 2012); Wichardt et al (2009) indeed offer an explanation for their results along these lines. Cognitive dissonance, roughly speaking, refers to a feeling of distress once we act against our internalised norms and values.…”

“…An arguable important feature which, to the best of our knowledge, has not been studied in the context of gender differences in altruistic giving but which we believe to be highly pertinent to the discussion is the effect of voluntary choice. That the possibility to choose aspects of the game may indeed have a substantial effect on behaviour in a distributional task was demonstrated, for instance, by Wichardt et al (2009). In the slightly different context of the ultimatum game, the authors find that rejection rates of low offers drop significantly once responders have to pay to participate (or else opt out); i.e.…”

More than Thirty Years of Ultimatum Bargaining Experiments: Motives, Variations, and a Survey of the Recent Literature

“…Although the ultimatum game is asymmetric by nature, one can further increase or decrease asymmetry by introducing asymmetry in conflict payoffs, outside options to be chosen or waved before playing the game, and asymmetries in information and communication possibilities Falk et al, 2003;Schmitt, 2004;Wichardt et al, 2009;Conrads and Irlenbusch, 2013). Naturally, such asymmetries favor those who are advantaged and disfavor the players in the disadvantaged role.…”