Stakes Matter in Ultimatum Games

By Steffen Andersen, Seda Ertac, Uri Gneezy, Moshe Hoffman, John A. List. 2011

250 citations recorded by the source corpus.

One of the most robust findings in experimental economics is that individuals in one-shot ultimatum games reject unfair offers. Puzzlingly, rejections have been found robust to substantial increases in stakes. By using a novel experimental design that elicits frequent low offers and uses much larger stakes than in the literature, we are able to examine stakes' effects over ranges of data that are heretofore unexplored. Our main result is that proportionally equivalent offers are less likely to be rejected with high stakes. In fact, our paper is the first to present evidence that as stakes increase, rejection rates approach zero. (JEL: C72, C78, C91)

Subfields: Management Science and Operations Research, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/d08ea7ad2ff538eb9869ab7bd4be5fead7770ff7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Management Science and Operations Research

1. John H. Kagel
2. Oliver Hart
3. Dmitry Taubinsky
4. David J. Cooper
5. Matthias Sutter

In Safety Research

1. David J. Cooper
2. John H. Kagel
3. Oliver Hart
4. Dmitry Taubinsky
5. Matthias Sutter
6. Martin G. Kocher

In Sociology and Political Science

1. Oliver Hart
2. John H. Kagel
3. David J. Cooper

Citations in the corpus

• Attention Variation and Welfare: Theory and Evidence from a Tax Salience Experiment (2016, result): “” Also similar in spirit is the work by Andersen et al. (2011), who show that higher stakes lead to more profit-seeking behavior in ultimatum games.”
• More than Thirty Years of Ultimatum Bargaining Experiments: Motives, Variations, and a Survey of the Recent Literature (2013, unknown): “While stake size effects on proposer and responder behavior are generally small (for a complete overview of the early literature, see Camerer, 2003), Andersen et al. (2011), show that rejections go down with an increasing stake size.”
• Incomplete Contracts and Control (2017, background): “25 See, e.g., Güth, Schmittberger, and Schwarze (1982).”
• Other Regarding Preferences: A Selective Survey of Experimental Results (2012, background): “Andersen et al. (2011) offer a more extreme variation on stake size, with the highest stakes being a thousand times higher than the lowest stakes.”