Fairness and Risk in Ultimatum Bargaining

We conduct an experiment in which subjects play an ultimatum game but, rather than bargaining over money, they bargain over lottery tickets for a prize. Compared to the standard ultimatum game, proposers offer a significantly lower percentage of lottery tickets, which is inconsistent with either ex ante or ex post fairness. In contrast, responders have a significantly higher acceptance threshold, which is consistent with ex post fairness. By varying the timing of the accept/reject decision of responders, we also show that intentions matter and present evidence of a choice anomaly in responder preferences concerning their willingness to accept extreme inequality