Title: Examining the impact of relative standing using an ultimatum bargaining game experiment

Authors: Muqun Li, Mark Pingle

Addresses: Department of Agricultural and Applied Economics, University of Wisconsin-Madison, USA. ' Department of Economics, University of Nevada, Reno, NV 89557–0016, USA

Abstract: This paper presents the results of an experiment designed to examine the extent to which a decision-maker|s relative standing affects bargaining behaviour. In each session, 14 participants played a series of one-shot ultimatum bargaining games. In one treatment, the participants were made aware of only their own cumulative outcome rank as they started each new game, while in a second treatment both their own rank and the rank of their bargaining partner was known. The results indicate relative standing does affect bargaining behaviour, particularly when the decision-maker knows both his own rank and the rank of the bargaining partner. A primary finding is that the provision of relative standing information can enhance well-being because it promotes the formation of mutually beneficial bargaining agreements.

Keywords: relative standing; positional concern; status; bargaining games; decision making; bargaining behaviour; well-being; mutually beneficial agreements.

DOI: 10.1504/GBER.2007.013700

Global Business and Economics Review, 2007 Vol.9 No.2/3, pp.183 - 201

Published online: 22 May 2007 *

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