Preferences, Intentions, and Expectations: A Large-Scale Experiment with a Representative Subject Pool

We specify and estimate an econometric model which separately identifies distributional preferences and the effects of perceived intentions on responder behavior in the ultimatum game. We allow the effects of perceived intentions to depend, among other things, on the subjective probabilities responders attach to the possible offers. We estimate the model on a large representative sample from the Dutch population. We find that the relative importance of distributional preferences and perceived intentions depends significantly on the socioeconomic characteristics of responders. Strong inequity aversion to the other player’s disadvantage is found for lower educated and older respondents. Responders tend to punish unfavorable offers more if they expect that fair proposals will occur with higher probability.

[1]  W. Güth,et al.  Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining , 2003 .

[2]  D. Friedman,et al.  A Tractable Model of Reciprocity and Fairness , 2006 .

[3]  L. Ross,et al.  The “false consensus effect”: An egocentric bias in social perception and attribution processes , 1977 .

[4]  Martin Dufwenberg,et al.  A theory of sequential reciprocity , 2004, Games Econ. Behav..

[5]  L. Jussim,et al.  The nature of stereotypes: a comparison and integration of three theories , 1987 .

[6]  James C. Cox,et al.  On the Nature of Reciprocal Motives , 2005 .

[7]  Geert Dhaene,et al.  Sequential Reciprocity in Two-Player, Two-Stages Games: An Experimental Analysis , 2007 .

[8]  Linda A. Jackson,et al.  Stereotype effects of attributions, predictions, and evaluations: No two social judgments are quite alike. , 1993 .

[9]  Charles Bellemare,et al.  On Representative Social Capital , 2004, SSRN Electronic Journal.

[10]  T. Offerman.  Hurting hurts more than helping helps , 2002 .

[11]  Ernst Fehr,et al.  Testing Theories of Fairness - Intentions Matter , 2000, Games Econ. Behav..

[12]  M. Rabin.  Published by: American , 2022 .

[13]  Charles Bellemare,et al.  Actions and Beliefs: Estimating Distribution-Based Preferences Using a Large Scale Experiment with Probability Questions on Expectations , 2005, SSRN Electronic Journal.

[14]  Karen E. Dill,et al.  Evaluations of Ingroup and Outgroup Members: The Role of Category-Based Expectancy Violation , 1997 .

[15]  M. Dufwenberg,et al.  Direct versus indirect reciprocity : An experiment , 2001 .

[16]  Colin Camerer.  Behavioral Game Theory: Experiments in Strategic Interaction , 2003 .

[17]  Chun-Lei Yang,et al.  The Hot Versus Cold Effect in a Simple Bargaining Experiment , 2003 .

[18]  Werner Güth,et al.  The Relevance of Equal Splits in Ultimatum Games , 2001, Games Econ. Behav..

[19]  Colin Camerer,et al.  Foundations of Human Sociality - Economic Experiments and Ethnographic: Evidence From Fifteen Small-Scale Societies , 2004 .

[20]  J. Brandts,et al.  Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games , 1998 .

[21]  J. Carpenter,et al.  Comparing Students to Workers: The Effects of Social Framing on Behavior in Distribution Games , 2004, SSRN Electronic Journal.

[22]  Jacob K. Goeree,et al.  Asymmetric inequality aversion and noisy behavior in alternating-offer bargaining games , 2000 .

[23]  Charles Bellemare,et al.  MEASURING INEQUITY AVERSION IN A HETEROGENEOUS POPULATION USING EXPERIMENTAL DECISIONS AND SUBJECTIVE PROBABILITIES , 2008 .

[24]  H. Hennig-Schmidt,et al.  Why People Reject Advantageous Offers - Non-monotone Strategies in Ultimatum Bargaining , 2008 .

[25]  Armin Falk,et al.  A Theory of Reciprocity , 2001, Games Econ. Behav..

[26]  G. Charness,et al.  Intention and Stochastic Outcomes: An Experimental Study , 2005 .

[27]  S. Blount.  When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences , 1995 .

[28]  Rachel Croson,et al.  When Do Fair Beliefs Influence Bargaining Behavior? Experimental Bargaining in Japan and the United States , 2004 .

[29]  C. Manski.  Identification of decision rules in experiments on simple games of proposal and response , 2002 .

[30]  Gerd Gigerenzer,et al.  Communicating Statistical Information , 2000, Science.

[31]  Werner Güth,et al.  The relevance of equal splits , 1998 .

[32]  Stephen E. G. Lea,et al.  Pride in economic psychology , 1997 .

[33]  K. Train.  Discrete Choice Methods with Simulation , 2003 .

[34]  Robert J. Oxoby,et al.  Sequential decision and strategy vector methods in ultimatum bargaining: evidence on the strength of other-regarding behavior , 2004 .

[35]  S. Huck.  Responder behavior in ultimatum offer games with incomplete information , 1999 .

[36]  Rick K. Wilson,et al.  Confusion or fairness in the field? Rejections in the ultimatum game under the strategy method , 2006 .

[37]  Charles Bellemare,et al.  On Representative Trust , 2003 .

[38]  E. Fehr.  A Theory of Fairness, Competition and Cooperation , 1998 .

[39]  S. Huck,et al.  Stackelberg Beats Cournot: On Collusion and Efficiency in Experimental Markets , 2001 .

[40]  Gary E. Bolton,et al.  ERC: A Theory of Equity, Reciprocity, and Competition , 2000 .