Take it or leave it! Experimental evidence on rationality, social preferences and bargaining

The ultimatum game has improved our understanding about the bargaining power associated with a threat, an issue where information and communication are central. This paper presents a selective review of the literature on economic experiments in the ultimatum game, organizing the major developments of the theory by incorporating the empirical evidence in this context. The results of these experiments have shown that people deviate systematically from the theoretical prediction; in fact, it has been found that proposers make bids close to equitable distribution and responders often reject offers they deem unfair. Unquestionably, this game has gained a central place in behavioral economics, so the review herein will be useful for researchers working both in bargaining and experimental economics.