Too Good to Be True - Suspicion-Based Rejections of Ultimatum Offers

Abstract

Prior research on negotiation and especially ultimatum bargaining has shown that fear of rejection may induce bargainers make high offers. In the current study we show that there is a limit to the beneficial effects of making high offers and that becoming to generous may backfire. participants were recipients in a variant of the Ultimatum Bargaining Game (UBG) in which only the allocator knew the amount of money that had to be distributed. The allocator then informed the participant that the pot contained 12 euros and offered the recipient either 5 euros (self-serving offer), 6 euros (equal offer), or 7 euros (altruistic offer). Results showed that altruistic offers roused more suspicion about the ommunicated pot size than self-serving and equal offers. Moreover, participants rejected self-serving and altruistic offers more often than equal offers. Subsequent analyses showed that these effects were explained by raised suspicion. Taken together, these results show that recipients in an UBG reject offers when they feel exploited and support our reasoning that bargainers may become suspicious that they are exploited when an altruistic offer appears too good to be true.