Ultimatum Game

Güth, W., Schmittberger, R., & Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior and Organization, 3(4) 367-388. doi: 10.1016/0167-2681(82)90011-7


Table of Contents

Description

History of Use

References

Description:

Purpose
The ultimatum game was designed to assess how individuals respond to situations where self-interest and equality are opposed.
Questions
The ultimatum game has 1 decision point for each player. However, it may also be played as a series of successive rounds. Pairs may remain the same across rounds or change each round. For a given round, the identity of pairs may or may not be revealed--players may or may not know with whom they are playing.
Sub-scales
N/A
Domain

Psychometrics

Sample items
The most common variant of the ultimatum game has 2 participants.
  • Player 1 (sometimes called the proposer or allocator) is given a sum of money $x.
  • Player 1 decides how much of $x to offer to player 2 (sometimes called the responder or recipient).
  • P2 can accept or reject the offer.
  • If P2 accepts the offer, P2 receives the offered amount and P1 receives the remainder ($x-$offer).
  • If P2 rejects the offer, neither player receives any money.
In variant #2 of the game:
  • P1 is given a sum of money $x.
  • P1 decides how much of $x to offer to P2, or how much s/he is willing to pay (WTP).
  • At the same time (before receiving the offer), P2 decides the smallest offer to accept, or how much s/he is willing to accept (WTA).
  • If WTP is greater than or equal to WTA, P2 receives the offer (P1's WTP) and P1 receives the remainder.
  • If WTP is less than WTA, neither player receives any money.
In still other variants:
  • Ps follow variant #2 except there is one P1 and multiple P2s. A rule, such as lowest WTA or WTA closest to WTP, decides the outcome. This introduces competition as a motivation.
  • Ps follow variant #2 except there are multiple P1s and multiple P2s. A rule, such as pairing players whose WTA and WTP match or overlap, decides the outcome in this market situation.

References:

Measure:
Güth, W., Schmittberger, R., & Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior and Organization, 3(4), 367-388. doi: 10.1016/0167-2681(82)90011-7
For reviews of Ultimatum Game research, see:
Uses:
  • Hewig, J., Kretschmer, N., Trippe, R. H., Hecht, H., Coles, M. G. H., Holroyd, C. B., & Miltner, W. H. R. (2011). Why humans deviate from rational choice. Psychophysiology, 48(4), 507-514. doi: 10.1111/j.1469-8986.2010.01081.x
  • van't Wout, M., Chang, L. J., & Sanfey, A. G. (2010). The Influence of Emotion Regulation on Social Interactive Decision-Making. Emotion, 10(6), 815-821. doi: 10.1037/a0020069
  • Koenigs, M., Kruepke, M., & Newman, J. P. (2010). Economic decision-making in psychopathy: A comparison with ventromedial prefrontal lesion patients. Neuropsychologia, 48(7), 2198-2204. doi: 10.1016/j.neuropsychologia.2010.04.012
  • Sauermann, J., & Kaiser, A. (2010). Taking Others into Account: Self-Interest and Fairness in Majority Decision Making. American Journal of Political Science, 54(3), 667-685.
  • Agay, N., Kron, S., Carmel, Z., Mendlovic, S., & Levkovitz, Y. (2008). Ultimatum bargaining behavior of people affected by schizophrenia. [Article]. Psychiatry Research, 157(1-3), 39-46. doi: 10.1016/j.psychres.2006.03.026

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