Effective equity experiences from an ultimatum experiment

Fairness like other social norms is usually stabilized by punishing norm deviations. Reward uncertainty, however,questions whether norm deviations can be detected and thus punished. By investing in information acquisition, aresponder in an ultimatum experiment determines endogenously whether unfair offers are detected andsanctionable. In our experiment a proposer and a responder can distribute among themselves 12 black and 12white chips where the monetary value of a white chip for the proposer can be rather high (‘high payoff mode’) orlow (‘low payoff mode’). The responder can buy information about the proposer’s reward type, resulting incommonly known monetary rewards.According to our results more than half of the responders did not buy reward information (30 out of 55). Buyingreward information on average did not help the responder nor did it improve efficiency. Surprisingly, commonlyknown reward information resulted in a lower share of efficient offers. A possible explanation is that mistrustdistracts attention.