This study reports on an experiment using variations of the ultimatum game. The experiment controls the amount and type of information known to the responder in the game. In two treatments, she knows both the absolute (money) and relative (fairness) payoffs from an offer. In the other two, she knows either only the absolute or only the relative payoffs. The predictions of four models for these treatments are tested: subgame-perfection, Bolton's comparative equilibrium, Ochs and Roth's absolute threshold, and Ochs and Roth's percentage threshold hypothesis.
Bibliographical noteFunding Information:
The author thanks Jerry Green, Eric Maskin, John Pratt, Matt Rabin, and George Wu for guidance and criticism, Russell Cooper for arranging for pilot experiments, and Cynthia Wachtell for help with subjects.A ll omissions or mistakesa re the responsibility of the author. Funding for experiments from the Economics Department of Harvard University and the Division of Research of Harvard Business School is gratefully acknowledged.
- Contingent weighting
- Ultimatum game