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Universität zu Köln
Wirtschafts- und Sozialwissenschaftliche Fakultät

Staatswissenschaftliches Seminar - Prof. Schmitz

Participation Costs for Responders can Reduce Rejection Rates in Ultimatum Bargaining

Philipp C. Wichardt, Daniel Schunk, and Patrick W. Schmitz

Economics Letters, Vol. 103 (1), 2009, 33-35.

Abstract. This paper reports data from an ultimatum mini-game in which responders first had to choose whether or not to participate. Participation was costly, but the participation cost was smaller than the minimum payoff that a responder could guarantee himself in the ultimatum game. Compared to a standard treatment, we find that the rejection rate of unfavorable offers is significantly reduced when participation is costly. A possible explanation based on cognitive dissonance is offered.

The paper is available for download.