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Interpersonal Comparisons of Utility in Bargaining : Evidence from a Transcontinental Ultimatum Game

Author

Listed:
  • Romina Boarini

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Jean-François Laslier

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Stéphane Robin

    (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract
This paper presents the experimental results of a "Transcontinental Ultimatum Game" implemented between India and France. The bargaining took the form of standard ultimatum games, but in one treatment Indian subjects made offers to French subjects and, in another treatment, French subjects made offers to Indian subjects. We observed that French→Indian bargaining mostly ended up with unequal splits of money in favour of French, while nearly equal splits were the most frequent outcome in Indian→French interactions. The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.

Suggested Citation

  • Romina Boarini & Jean-François Laslier & Stéphane Robin, 2009. "Interpersonal Comparisons of Utility in Bargaining : Evidence from a Transcontinental Ultimatum Game," Post-Print halshs-00435110, HAL.
    • Handle: RePEc:hal:journl:halshs-00435110
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00435110
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    References listed on IDEAS

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    3. Bryan C. McCannon & John Stevens, 2017. "Role of personality style on bargaining outcomes," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(9), pages 1166-1196, September.
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    6. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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    More about this item

    Keywords

    Interpersonal Comparisons of Utility; Fairness; Bargaining experiment; Ultimatum Game;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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