Ultimatum Games and Wages: Evidence of an “Implicit Bargain”?

In this paper, I argue that both ultimatum game outcomes and wages may be in¬fluenced by what the result of a bargain would have been: The players in the ultimatum game, just as the parties to the labor contract, seem to engage in what may be called an “implicit” or, in Selten' s words, an “imaginary” bargain. In determining ultimatum game outcomes, assuming an implicit bargain can account for the experimental evidence on the role of responder bargaining power. Moreover, the implications of the implicit bar¬gain for the wage setting process are compatible with the stylized facts of wage determination.