Expectations and social decision-making: biasing effects of prior knowledge on Ultimatum responses

Abstract

Psychological studies have long demonstrated effects of expectations on judgment, whereby the provision of information, either implicitly or explicitly, prior to an experience or decision can exert a substantial influence on the observed behavior. This study extended these expectation effects to the domain of interactive economic decision-making. Prior to playing a commonly-used bargaining task, the Ultimatum Game, participants were primed to expect offers that would be either relatively fair (a roughly equal split of an endowed amount) or unfair (an unequal split, to the participant’s disadvantage). A third group played the Game without receiving any prior information about expected offers. As predicted, these expectations had a large effect on decisions made by participants in the Ultimatum Game, with those with expectations of fairness rejecting significantly more unfair offers than those participants who expected low offers. Implications for models of fairness and equity are discussed.