Bargaining under surveillance: Evidence from a three-person ultimatum game

This paper examines how third-party surveillance influences preferences over distributional outcomes. In addition, we examine what motivates people to invest economic resources to monitor decision-making processes. Our results show that a large majority of individuals is willing to pay for a right to monitor decision-making processes over distributional outcomes despite pecuniary incentives to the contrary. We find that electronic third-party surveillance does not affect distributional outcomes in a three-person ultimatum game. Finally, we find that third- parties are the most over-optimistic about their own outcomes when they have a chance to signal their presence to the negotiators. Our results suggest that people may overestimate the impact of transparent decision-making on economic outcomes.