Disapproval aversion or inflated inequity acceptance? The impact of expressing emotions in ultimatum bargaining

Chen, J.; Kamei, K.

doi:10.1007/s10683-017-9554-z

Disapproval aversion or inflated inequity acceptance? The impact of expressing emotions in ultimatum bargaining

Chen, J.; Kamei, K.

Authors

J. Chen

K. Kamei

Abstract

Past experimental research has shown that when rating systems are available, buyers are more generous in accepting unfair offers in ultimatum bargaining. However, it also suggests that, under these conditions, sellers behave more fairly to avoid receiving negative feedback. This paper experimentally investigates which effect is stronger with the use of a rating system: buyers’ inflated inequity acceptance or sellers’ disapproval aversion. We explore this question by varying the information condition on the buyers’ side. Our experiment shows that in a setup where the size of the pie is common knowledge for both buyers and sellers, when a rating system is present, the sellers exhibit disapproval aversion but the buyers do not display greater acceptance of inequity. By contrast, when only sellers are aware of the size of the pie, sellers behave aggressively to exploit buyers and their behavior does not change in the presence of a rating system; however, buyers display greater acceptance of inequity when a rating system is present. We discuss how these results can be explained by a theoretical model that includes sellers’ social disapproval aversion and buyers’ disappointment aversion in addition to the players’ inequality aversion.

Citation

Chen, J., & Kamei, K. (2018). Disapproval aversion or inflated inequity acceptance? The impact of expressing emotions in ultimatum bargaining. Experimental Economics, 21(4), 836-857. https://doi.org/10.1007/s10683-017-9554-z

Journal Article Type	Article
Acceptance Date	Nov 1, 2017
Online Publication Date	Nov 13, 2017
Publication Date	Dec 31, 2018
Deposit Date	Nov 1, 2017
Publicly Available Date	Nov 2, 2017
Journal	Experimental Economics
Print ISSN	1386-4157
Electronic ISSN	1573-6938
Publisher	Springer
Peer Reviewed	Peer Reviewed
Volume	21
Issue	4
Pages	836-857
DOI	https://doi.org/10.1007/s10683-017-9554-z
Public URL	https://durham-repository.worktribe.com/output/1345326

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© The Author(s) 2017 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.