Deception and Retribution in Repeated Ultimatum Bargaining

Abstract

This paper investigates the dynamics of deception and retribution in repeated ultimatum bargaining. Anonymous dyads exchanged messages and offers in a series of four ultimatum bargaining games that had prospects for relatively large monetary outcomes. Variations in each party's knowledge of the other's resources and alternatives created opportunities for deception. Revelation of prior unknowns exposed deceptions and created opportunities for retribution in subsequent interactions. Results showed that although proposers and responders chose deceptive strategies almost equally, proposers told more outright lies. Both were more deceptive when their private information was never revealed, and proposers were most deceptive when their potential profits were largest. Revelation of proposers' lies had little effect on their subsequent behavior even though responders rejected their offers more than similar offers from truthful proposers or proposers whose prior deceit was never revealed. The discussion and conclusions address the dynamics of deception and retribution in repeated bargaining interactions. © 2000 Academic Press.