Sense of fairness or hunger for revenge? It does make a difference

Abstract

We analyze the driving factors of anomalistic patterns found in experimental studies related to bargaining games. In particular, we investigate whether the well-documented deviation from self-interested behavior can be partly, or entirely, attributed to revenge rather than fairness. Although, in general, related literature does not distinguish between the two latter notions, we highlight their differences and show that revenge significantly, and independently from the sense of fairness, contributes to decision-making in ultimatum games. Moreover, we show that, when controlling for various attributes, the hunger for revenge becomes the sole driving factor for both positively and negatively reciprocal behavior, rendering the sense of fairness insignificant. Our further cross-sectional analysis yields that gender differences are also very significant; however, the measured effects of fairness and revenge remain unaffected by this latter finding.