Skip to main content
SpringerLink
Log in

Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game

  • Published:
Experimental Economics Aims and scope Submit manuscript

Abstract

Two recent models incorporating fairness considerations into the economics literature based on agents' concerns about the distribution of payoffs between themselves and others (Fehr-Schmidt, 1999, Quarterly Journal of Economics. 114 (3), 769–816; Bolton-Ockenfels, 2000, American Economic Review. 90, 166–193) are investigated using a new three-person ultimatum game: One person allocates a sum of money to two others, one of which is randomly chosen to accept or reject the offer. Rejection gives both the responder and the proposer zero income and a positive consolation prize for the non-responder. The data show essentially no reductions in rejection rates, holding offers constant, with and without consolation prizes, contrary to both models' predictions.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Blount, S. (1995). “When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences.” Organizational Behavior and Human Decision Processes. 63(2), 131–144.

    Google Scholar 

  • Bolton, G. and Ockenfels, A. (1998). “Strategy and Equity: An ERC analysis of the Güth-van Damme Game.” Journal of Mathematical Psychology. 42(2), 215–226.

    Google Scholar 

  • Bolton, G. and Ockenfels, A. (2000). “ERC: A Theory of Equity, Reciprocity and Competition.” American Economic Review. 90, 166–193.

    Google Scholar 

  • Charness, G. (1998). “Attribution and Reciprocity in a Simulated Labor Market: An Experimental Investigation.” Mimeographed, Universitat Pampea Fabra.

  • Charness, G. and Rabin, M. (2000). “Social Preferences: Some Simple Tests and a New Model.” Mimeographed.

  • Dufwenberg, M. and Kirchsteiger, G. (1999). “ATheory of Sequential Reciprocity.” Mimeo, CentER for Economic Research, Tillburg.

    Google Scholar 

  • Falk, A and Fisbacker, U. (1999). “A Theory of Reciprocity.” Working paper number 6, University of Zurich.

  • Fehr, E., Kirchsteiger, E., and Riedl, A. (1993). “Does Fairness Prevent Market Clearing? An Experimental Investigation.” The Quarterly Journal of Economics. 108, 437–459.

    Google Scholar 

  • Fehr, E. and Schmidt, K. (1999). “A Theory of Fairness, Competition and Cooperation.” Quarterly Journal of Economics. 114(3), 769–816.

    Google Scholar 

  • Fershtman, C. and Gneezy, U. (2001). “Strategic Delegation: An Experiment.” RAND Journal of Economics. 32, 352–368.

    Google Scholar 

  • Forsythe, R., Horowitz, J., Savin, N.E., and Selton, M. (1994). “Fairness in Simple Bargaining Experiments.” Games and Economic Behavior. 6, 347–369.

    Google Scholar 

  • Güth, W. and Van Damme, E. (1998). “Information, Strategic Behavior and Fairness in Ultimatum Bargaining: An Experimental Study.” Journal of Mathematical Psychology. 42(2/3), 227–247.

    Google Scholar 

  • Ham, J.C., Kagel, J.H., and Lehrer, S.F. (in Press). “Randomization, Endogeniety, and Laboratory Experiments.” Journal of Econometrics.

  • Hsiao, C. Analysis of Panel Data. (1986). Cambridge University Press, Cambridge.

    Google Scholar 

  • Kagel, J., Kim, C., and Moser, D. (1996). “Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs.” Games and Economic Behavior. 13(1), 100–110.

    Google Scholar 

  • Kahneman, D. and Tversky, A. (1979). “Prospect Theory: An Analysis of Decision Under Risk.” Econometrica. 47, 263–291.

    Google Scholar 

  • Levine, D.K. (1998). “Modeling Altruism and Spitefulness in Experiments.” Review of Economic Dynamics. 1(3), 593–622.

    Google Scholar 

  • Oberholzer-Gee, F. and Eichenberger, R. (1998). “Fairness! What Fairness? Focusing Effects in Dictator Game Experiments.” Working paper, University of Zurich.

  • Rabin, M. (1993). “Incorporation Fairness into Game Theory and Economics.” American Economic Review. 83(5), 1281–1302.

    Google Scholar 

  • Roth, A.E., Prasnikar, V., Okuno-Fujiwara, M., and Zamir, S. (1991). “A Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study.” American Economic Review. 81(5), 1068–1095.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Ohio State University, 410 Arps Hall, 1945 North High St, Columbus, OH, 43210-1172, USA

    John H. Kagel

  2. Department of Economics, University of Pittsburgh, Posvar Hall, 230 S. Bouquet St., Pittsburgh, PA, 15260, USA

    Katherine Willey Wolfe

Authors
  1. John H. Kagel
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Katherine Willey Wolfe
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kagel, J.H., Wolfe, K.W. Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game. Experimental Economics 4, 203–219 (2001). https://doi.org/10.1023/A:1013290819565

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1013290819565

Search

Navigation