Anticipated Communication in the Ultimatum Game
Mario Capizzani, Luigi Mittone, Andrew Musau, Antonino Vaccaro
2017
Games
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... bedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Anticipated verbal feedback in a dictator game has been shown to induce altruistic behavior. However, in the ultimatum game which, apart from generosity, entails a strategic component since a proposer may (rightly) fear that the responder will reject a low offer, it remains an open question whether anticipated verbal communication can be effective in increasing offers. We implement a between-subjects experimental design in the ultimatum game with strategy method manipulating the form of anticipated verbal communication (no communication, one-sided communication from proposers and two-sided communication) and find that offers are significantly higher in the presence of anticipated two-sided communication. However, anticipated one-sided communication from proposers has no effect on offers, suggesting, as found in previous studies, that it is the anticipation of feedback that is relevant. Ellingsen and Johannesson [2] argue that individuals are motivated by concerns for pride and blame which are prominent in the presence of anticipated verbal feedback whereas Xiao and Houser [1] similarly conclude that allocators in the dictator game have a preference for avoiding written expression of disapproval, or negative emotions. Brook and Servátka [3] further illustrate that this anticipated communication effect is not constrained to verbal communication by allowing recipients to convey approval and disapproval of allocations through sending pictorial representations of facial expressions (emoticons). While empirical evidence clearly shows that offer levels are higher in the ultimatum game in comparison to donations in the dictator game, a few studies have compared behavior in both games to uncover the role that strategic considerations play in the ultimatum game. 1 For example, Charness and Gneezy [4] experimentally investigate how anonymity and social distance affect behavior in these games and find contrasting effects. In the dictator game, reducing social distance significantly increases donations, whereas in the ultimatum game, there is no significant effect on offers. Such comparative studies highlight that behavioral insights obtained in one game do not naturally extend to the other. Only a handful of experimental studies have considered the role of anticipated communication in the ultimatum game. In an earlier related paper, Xiao and Houser [5] allow one-sided communication from the responder to proposer in the ultimatum game in the form of a written message accompanying the "accept" or "reject" decision, occurring after the responder has learnt of the offer from the proposer. They find that proposer offers do not differ compared to the standard condition, but responders reject unfair offers significantly less frequently. In their assessment, the lower rejection rates imply that communication supplements costly punishment by providing a medium where an aggrieved responder can express her negative emotions. Andersson et al. [6] in turn allow one-sided communication from proposers to responders in the ultimatum game in the form of written messages. Proposers communicate before submitting an offer and responders view the messages either before making their acceptance decision or after. They find that average payoffs are significantly higher in the before condition and not in the after condition and attribute this to persuasion effects of anticipated communication, ruling out self-image effects. Our paper contributes to this strand of literature by examining how anticipated verbal communication affects proposer and responder behavior in an unrestricted bargaining setting. It differs from the aforementioned studies in that the responder never learns of the proposer's offer until the conclusion of play. This seemingly small difference results in a number of implications. First, in Xiao and Houser [5]'s study, it is likely that the proposer's offer which is known to the responder is a focal point in the responder's communication. For example, it is evident that expressions of negative emotions by a responder are triggered by knowledge of the proposer's offer. Our design eliminates this focal point and therefore restricts the prevalence of emotional responses by responders that result from having direct knowledge of proposer choices. Second, in relation to Andersson et al. [6]'s study, a proposer in our study can choose to be persuasive in the messages or to convey a positive self-image through deception, for example, by claiming that she offered a higher amount than her actual offer. Gneezy [7] finds that in two-person interactions in which lying increases the payoffs to the liar in expense of her counterpart, the average person prefers not to lie if this only leads to a marginal increment in payoff but a significant reduction in the counterpart's payoff. Therefore, our study provides a test of Gneezy [7]'s conjecture in a bargaining context. In addition, our paper contributes to the literature by studying the effect of anticipated two-sided communication which to the best of our knowledge has not been investigated before in the ultimatum game. The content of the communication is not restricted in our experiment, but because identifiability may introduce nonpecuniary influences on preferences, participants are not allowed to divulge 1 By viewing the ultimatum game simply as the dictator game with the recipient having the option to veto the allocation, then one may attribute any behavioral differences between the games to the existence of this veto option in the ultimatum game. Games 2017, 8, 29 3 of 20 information in the written messages that can lead to them being identified. We find that impulses towards generosity still persist in the presence of strategic considerations with two-sided communication, with offers under two-sided communication being significantly higher to either one-sided communication from proposers to responders or no communication. Offers under one-sided communication and no communication do not differ, suggesting that the anticipation effect relates to the anticipation of feedback in the communication (and not anticipation of communication per se). In terms of responder behavior, we observe a significant amount of non-monotonicity in responder choices across all of our treatments, with higher conditional rejection frequencies for high (above equal-split) and low (below equal-split) offers. Rejection rates are higher under two-sided communication, relative to either one-sided communication or no communication. However, as was the case for offers, responder behavior does not differ between no communication and one-sided communication. A qualitative analysis of the informational content of communication in the communication treatments reveals that the vast majority of participants' communication are statements or discussions of the ultimatum game being played (such as references to "offer", "accept" and "reject"). We find support for Gneezy [7]'s conjecture, observing that proposers do not lie about their offers. However, we find evidence that proposers either avoid communication or use persuasion to justify lower offers under one-sided communication. They also restrict the content of communication to conversations that exclude references to fairness in this condition, which taken together may account for the observed behavioral differences. seminar participants in Trento for helpful comments and suggestions. In particular, for Andreoni and Rao [15], one sided communication results in lower contributions compared to no communication and all other communication conditions.
doi:10.3390/g8030029
fatcat:cozxml6pgjftvomey6hoepuftm