Experimental Analysis of Corporate Wage Negotiations Based on the Ultimatum Game: A New Approach Using a Combination of Laboratory and fMRI Experiments

Abstract

Workers who have limited wealth are also at a disadvantage in terms of income distribution. In accounting this brings to mind the way in which managers may limit wages by manipulating accounting information when negotiating with workers. While researchers have investigated whether or not managers manipulate information to keep workers’ wages low, they have rarely been able to produce sufficient empirical evidence to support their arguments. So we seek to bridge this gap between the present conditions and academic research. Focusing on the recent tendency for labor-management negotiations to take the form of individual bargaining between managers and workers, we conduct experiments of psychology and perform neuro-experiments using fMRI. It was found that a trend existed where managers who had a high level of empathy and would normally be expected to recognize workers’ difficult circumstances, conversely tended to compel workers to accept unfavorable outcomes.