Robert Shupp
Ball State University
Pamela Schmitt
United States Naval Academy
Kurtis Swope
United States Naval Academy
Abstract:
This paper examines behavior in a three-player ultimatum game. The payoff
to the non-decision-making player (the "hostage") is separate from the
bargaining pie and varies. We find that while responders may behave altruistically
towards the hostage, they are more likely to reject a given offer if it
leaves them with a more inequitable payoff relative to the hostage. Offers
appear to be unaffected by the presence of a hostage. Though not a direct
test of the Fehr and Schmidt (1999) and Bolton and Ockenfels (2000) models,
our results are qualitatively consistent with their predictions.