Year: 2013
Type: preprint
Abstract: We experimentally investigate the relevance of (asymmetric) outside options in ultimatum bargaining. Building on the generalized equity principle formulated by Selten (1978) we derive three di erent equity rules. These equity rules can explain 43% of all o ers. Our within-subject design allows us to show that proposers apply the equity rules in a self-serving manner, i.e., proposers tend to follow the rules that suggest the highest payo for them. This tendency leads to high ine ciencies due to frequent rejections.
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3123094578