American Economic Review: Vol. 93 No. 3 (June 2003)
Print Article Summary Export Citation
Sign up for Email Alerts Follow us on Twitter
What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game
Andreoni, James, Marco Castillo, and Ragan Petrie. 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game ." American Economic Review, 93(3): 672-685.
The ultimatum game, by its all-or-nothing nature, makes it difficult to discern what kind of preferences may be generating choices. We explore a game that convexifies the decisions, allowing us a better look at the indifference curves of bargainers while maintaining the subgame-perfect equilibrium. We conclude that bargainers' preferences are convex and regular but not always monotonic. Money-maximization is the sole concern for about half of the subjects, while the other half reveal a preference for fairness. We also found, unexpectedly, the importance of risk aversion among money-maximizing proposers, which in turn generates significant bargaining power for fair-minded responders.
Article Full-Text Access