Construct · 1 fields · 3 citations

ultimatum game: a standalone construct

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ultimatumgame1 CONSTRUCTUltimatum gameGÜTH · UNFAIR-OFFER TEST

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Behavioral economics

A two-player bargaining game that tests fairness preferences

Werner Güth, Rolf Schmittberger, and Bernd Schwarze introduced the ultimatum game in 1982 as a laboratory test of bargaining, in which one player, the proposer, offers a division of a fixed sum of money and a second player, the responder, either accepts, so both keep the proposed shares, or rejects, so both get nothing. Standard rational-choice theory predicts that a self-interested responder should accept any positive offer, so a proposer should offer the smallest possible amount and keep almost everything, yet across many replications responders routinely reject offers they judge unfair, commonly those below about a fifth of the stake, and proposers anticipate this by offering close to an even split. Ernst Fehr and Klaus Schmidt (1999) formalized the pattern with a model of inequity aversion, in which people place negative value on unequal outcomes, giving the observed rejections a preference-based account rather than treating them as error. A meta-analysis by Hessel Oosterbeek, Randolph Sloof, and Gijs van de Kuilen (2004) confirmed the robustness of the basic result while documenting variation in rejection behavior across cultures. The game is distinctive as one of the simplest experimental designs that separates the purely self-interested prediction from observed fairness-driven behavior, and it anchors a large literature in experimental and behavioral economics on other-regarding preferences.[1][2][3]

Unit
A two-player, one-shot bargaining experiment characterized by the offer made and whether it is accepted or rejected
Recovery means
Not applicable
Measured by
Operationalized in the laboratory by the size of the proposer's offer and the responder's binary accept or reject decision, often summarized by the mean offer and the rejection rate

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Nearby constructs

fairness4 fields · 4 citationsjingle · one word, four constructsgame2 fields · 3 citationsjingle · one word, two constructsNash equilibrium1 fields · 2 citationsanchor · a standalone construct

References

  1. Güth, W., Schmittberger, R., & Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior & Organization, 3(4), 367–388. https://doi.org/10.1016/0167-2681(82)90011-7
  2. Fehr, E., & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The Quarterly Journal of Economics, 114(3), 817–868. https://doi.org/10.1162/003355399556151
  3. Oosterbeek, H., Sloof, R., & van de Kuilen, G. (2004). Cultural differences in ultimatum game experiments: Evidence from a meta-analysis. Experimental Economics, 7(2), 171–188. https://doi.org/10.1023/B:EXEC.0000026978.14316.74

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