Saturday, 31 March 2012: 3:15 PM
In late 2009, we conducted an Ultimatum Bargaining Game with more than 500 US-Americans and German participants. They were invited to participate through the internet as well as through newspapers. We asked them to split up an inheritance of 1,200 EUR between three beneficiaries. These beneficiaries inherited different roles. In our basic version the first person proposes one out of 18 split-ups, the second person has the right to accept or reject the proposal, and the third person has no rights at all. The role as proposer is auctioned off. As proposer, 42 % vote for an equal split, 18 % for the power coalition and 9 % for the Homo Oeconomicus. Homo Oeconomicus is reflected as 1,000 EUR for the proposer, 100 EUR for the accepter/rejecter and 100 EUR for the third beneficiary. As accepter, the notions of fairness and inequality aversion dominate decision making. To our surprise, US-Americans are more equality oriented than Germans.
In our second version, the role of the proposer was assigned randomly – after the decisions had been made. Due to this change, we expected the rate of proposal for an equal split to increase significantly. Almost ¾ of all participants voted for the equal split and the intercontinental divide in behavior vanished almost completely.
To interpret the decisions made, we estimated different maximum likelihood probit regression models. The probability of proposing as well as accepting the distribution of Homo Oeconomicus increases with the level of rationality and the size of the bid. In addition, more educated and management-oriented participants are more likely to propose the Homo Oeconomicus split-up.