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Play Versus Strategy Method: Behavior and the Role of Emotions in the Ultimatum Game

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Abstract

In the context of a three-person ultimatum game featuring a proposer and two responders, this paper aims to investigate whether there are differences in bargainers’ behavior engendered by the use of the play and the strategy methods and to shed light on the role of emotions in explaining these differences. Although proposers correctly expect responders facing the play and the strategy methods to feel different emotions, our results reveal that they offer the same amount to both responders, on average. The two response methods also yield quantitatively similar acceptance rates. We thus provide further evidence that the play and the strategy methods do not significantly bias the behavior of bargainers.

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Notes

  1. As well as the standard one-shot 2-person ultimatum game, several variations can be found in the literature. For surveys, see Roth (1995), Camerer (2003) and Güth and Kocher (2014).

  2. An alternative, but less employed, form of the strategy method requires responders to specify a minimal acceptable offer (MAO)—a cutoff amount below which they reject all offers—before being informed about the actual allocation proposal. Blount and Bazerman (1996) show that the form of the strategy method (Selten or MAO) significantly affects responders’ behavior: namely, offers are accepted less frequently when responders report a series of binary decisions than when they announce a MAO.

  3. For a more detailed discussion on the pros and cons of the strategy method see Roth (1995, pp. 322–323).

  4. The literature has tested whether there are differences in behavior between the play and the strategy method in settings other than the ultimatum game. For instance, Brandts and Charness (2000) examine the behavior of first- and second-movers in two simple games (namely, the prisonner’s dilemma and the chicken game) and report no differences in either players’ behavior. In the context of a simplified trust game, Casari and Cason (2009) show that trustors’ behavior is unaffected by the response method. More recently, Fischbacher et al. (2012) find that the classification of preference-types (namely, conditional cooperators and free riders) in the “hot” version of the public good game is consistent with that obtained in the “cold” version.

  5. Several works have extended the ultimatum game to more than two players (see, among others, Roth et al. 1991; Güth and van Damme 1998; Bereby-Meyer and Niederle 2005; Fischbacher et al. 2009; McDonald et al. 2013). Güth et al. (2014), albeit different, is the study most closely related to our framework.

  6. This behavior is referred to as mismatching (Pruitt 1981).

  7. The precise wording (translated from German) was: “Please think back to your decision task. With what intensity did you feel the following emotions? Do not take too much time and give your first impression of how you felt.” The wording is very similar to that used in previous studies (see, e.g., Offerman 2002; Reuben and van Winden 2010).

  8. We allowed subjects to choose more than one item as it is well known that individuals may experience multiple emotions simultaneously (Ekman and O’Sullivan 2006). Subjects were not required to rate the intensity of expected interpersonal emotions as providing precisely the extent of others’ feelings is far from being trivial, and consequently the probability of misreporting is high. Hence we avoided rendering participants’ task unnecessarily cumbersome and preferred to construct the extent of expected interpersonal emotions by using principal component analysis (see Sect. 3).

  9. An English translation of the instruction can be found in the Supplement.

  10. The practice trial did not involve any interaction (the others’ decisions were selected at random by the computer). Its sole aim was to familiarize the participants with the game and no payments were associated with this task.

  11. The elicited first-order beliefs were not incentivized as done, among others, by Gehrig et al. (2007) and Bellemare et al. (2008). For obvious reasons, “hot” responders were not asked their beliefs about the proposer behavior.

  12. Ma-Kellams and Blascovich (2013) investigate the effect of monetary incentives on empathic accuracy. In their study participants watched videotaped individuals discussing recent emotional experiences and had to predict the emotions felt by these individuals using a psychometric scale that contained 20 items describing different feelings. Ma-Kellams and Blascovich (2013) show that participants in the treatment group (where empathic accuracy is incentivized) perform worse in detecting others’ emotions than participants in the control group (where empathic accuracy is not incentivized). This result is expected to hold true in settings that measure expected interpersonal emotions using a number of items similar to that used by Ma-Kellams and Blascovich (2013), as we do here.

  13. Unless otherwise stated, all p values are two-sided. A p value less than or equal to 0.05 is considered statistically significant.

  14. Had we based proposers’ expected interpersonal emotions on the suggested allocation, results would have remained unchanged. For instance, proposers who suggest the same substantial offer to Y and Z (i.e., \(y=z\ge \) 30) expect “hot” responders to feel more positive emotions, and less prosocial and neutral emotions, than “cold” responders (WRT, p values equal to 0.009, 0.011, and 0.021 for Positive, Prosocial, and Neutral, respectively). This shows that proposers’ expected interpersonal emotions are driven by the response method and not by the suggested allocation.

  15. The same result is obtained by comparing the overall amount offered to Y and Z, i.e., \(y+z\), between HUG and CUG (WRT, p value= 0.262).

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Authors and Affiliations

  1. Department of Economics, University of Verona, Via Cantarane 24, 37129, Verona, Italy

    Chiara Nardi

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  1. Chiara Nardi
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Correspondence to Chiara Nardi.

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C. Nardi is grateful to the Max Planck Institute of Economics (Jena) for financial support and to Werner Güth, Maria Vittoria Levati, and two anonymous referees for useful remarks and suggestions.

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Nardi, C. Play Versus Strategy Method: Behavior and the Role of Emotions in the Ultimatum Game. Ital Econ J 4, 91–106 (2018). https://doi.org/10.1007/s40797-017-0070-2

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