Social Preferences, Efficiency and Personal Values in Ultimatum Bargaining

Abstract

How do people trade off efficiency against equality concerns? To study this question, we conducted a modified mini ultimatum game (N=120) in which proposers were asked to choose between offering 8:2 and y:y, y∈{5, 4.5, 4,.., 0.5}; all offers in Euro. According to the data, 58 of 60 proposers have a unique switching point towards the unequal split and the majority of switching occurs between 3.5:3.5 and 2:2. Regarding the variance of the switching, we find that subjects with a comparably high interest in control over resources (higher Power values) tend to switch earlier. Moreover, after reversing roles, subjects who have previously been responders show a far stronger inclination to stick to the equal split indicating that knowing how it is to be in the other's shoes increases other-regarding behaviour.