Stakes Matter in Ultimatum Games

Steffen Andersen, Seda Ertaç, Uri Gneezy, Moshe Hoffman, John A. List

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

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.
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.
LanguageEnglish
JournalAmerican Economic Review
Volume101
Issue number7
Pages3427–3439
ISSN0002-8282
DOIs
StatePublished - 2011

Cite this

Andersen, S., Ertaç, S., Gneezy, U., Hoffman, M., & List, J. A. (2011). Stakes Matter in Ultimatum Games. American Economic Review, 101(7), 3427–3439. DOI: 10.1257/aer.101.7.3427
Andersen, Steffen ; Ertaç, Seda ; Gneezy, Uri ; Hoffman, Moshe ; List, John A. . / Stakes Matter in Ultimatum Games. In: American Economic Review. 2011 ; Vol. 101, No. 7. pp. 3427–3439
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Andersen, S, Ertaç, S, Gneezy, U, Hoffman, M & List, JA 2011, 'Stakes Matter in Ultimatum Games' American Economic Review, vol. 101, no. 7, pp. 3427–3439. DOI: 10.1257/aer.101.7.3427

Stakes Matter in Ultimatum Games. / Andersen, Steffen; Ertaç, Seda; Gneezy, Uri; Hoffman, Moshe; List, John A. .

In: American Economic Review, Vol. 101, No. 7, 2011, p. 3427–3439.

Research output: Contribution to journalJournal articleResearchpeer-review

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Andersen S, Ertaç S, Gneezy U, Hoffman M, List JA. Stakes Matter in Ultimatum Games. American Economic Review. 2011;101(7):3427–3439. Available from, DOI: 10.1257/aer.101.7.3427