Offered a split by another party, people reject unfair offers even at cost to themselves, so fairness norms constrain bargaining.
Güth's 1982 design. Offers below about 20% are routinely rejected, which is money refused to punish unfairness — the most replicated evidence that people are not narrowly self-interested.
In practice
- A contractor offered 5% of a joint windfall walks away from the money rather than accept the split.
- A team told their bonus pool is a tenth of the department's next door declines the pool, and the money goes back unclaimed.
- Possible explanations
- Explanations include fairness norms, in which an unfair offer is worth paying to punish; anger as a proximate mechanism; and reputation, since in repeated life refusing signals that one cannot be exploited.
- In its favour
- It is among the most replicated results in experimental economics, holding across many countries and stake sizes, and it is the clearest evidence that people are not narrowly self-interested.
- Against it
- Offers and rejections vary considerably across cultures, and behaviour in a laboratory with a stranger and one round may not transfer to the repeated bargaining people mostly do.
- Standing
- The most replicated evidence that people are not narrowly self-interested.
- Further reading
- Wikipedia
- Subject
- Games & Strategic Interaction
- Essay
- What is provable, and what people actually do