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Information acquisition in the ultimatum game: An experimental study

Published online by Cambridge University Press:  14 March 2025

Anders U. Poulsen  and
Jonathan H. W. Tan
Anders U. Poulsen*
Affiliation:
School of Economics, University of East Anglia, Norwich, United Kingdom
Jonathan H. W. Tan*
Affiliation:
Institute of Microeconomics, European University Viadrina, Frankfurt (Oder), Germany
*
e-mail: a.poulsen@uea.ac.uk
e-mail: tan@euv-ffo.de
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Abstract

We experimentally investigate if free information disadvantages a player relative to when information is unavailable. We study an Ultimatum game where the Proposer, before making an offer, can obtain free information about the Responder's minimum acceptable offer. Theoretically, the Proposer should obtain the information and play a best reply to the Responder's minimum acceptable offer. Thus the Responder should get the largest share of the surplus. We find that an increasing number of Proposers become informed over time. Moreover, the proportion of Proposers who use the information to maximize money earnings increases over time. The majority of information-acquiring Proposers, however, refuse to offer more than one-half and play a best reply only to Responders who accept offers of one-half or less. This, together with a substantial proportion of Proposers who choose to remain uninformed, means that the availability of free information backfires for Proposers only by a little.

Keywords

Information acquisitionUltimatum gameFairnessInequity aversion

JEL classification

D63: Equity, Justice, Inequality, and Other Normative Criteria and Measurement C70: General D80: General

Information

Type
Research Article
Information
Experimental Economics , Volume 10 , Issue 4 , December 2007 , pp. 391 - 409
Copyright
Copyright © 2006 Economic Science Association

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Footnotes

Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9143-z.

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