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Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game

Published online by Cambridge University Press:  14 March 2025

John H. Kagel  and
Katherine Willey Wolfe
John H. Kagel*
Affiliation:
Department of Economics, Ohio State University, 410 Arps Hall, 1945 North High St. Columbus, OH 43210-1172, USA
Katherine Willey Wolfe*
Affiliation:
Department of Economics, University of Pittsburgh, Posvar Hall, 230 S. Bouquet St., Pittsburgh, PA 15260, USA
*
email: kagel.4@osu.edu
email: kwwst2@pitt.edu
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Abstract

Two recent models incorporating fairness considerations into the economics literature based on agents’ concerns about the distribution of payoffs between themselves and others (Fehr-Schmidt, 1999, Quarterly Journal of Economics. 114 (3), 769-816; Bolton-Ockenfels, 2000, American Economic Review. 90,166-193) are investigated using a new three-person ultimatum game: One person allocates a sum of money to two others, one of which is randomly chosen to accept or reject the offer. Rejection gives both the responder and the proposer zero income and a positive consolation prize for the non-responder. The data show essentially no reductions in rejection rates, holding offers constant, with and without consolation prizes, contrary to both models’ predictions.

Keywords

ultimatum gameincome inequality aversionfairness models

JEL classification

D63: Equity, Justice, Inequality, and Other Normative Criteria and Measurement C78: Bargaining Theory • Matching Theory C90: General
Type
Research Article
Information
Experimental Economics , Volume 4 , Issue 3 , December 2001 , pp. 203 - 219
Copyright
Copyright © 2002 Economic Science Association

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