Reference Shift in the Market Ultimatum

Abstract: We tested the impact of markets on the ultimatum game to examine the social context in which negotiations occur. We define basic forms of network structure around an ultimatum game, using the network concept motif, and compare the impact of structure relative to the bilateral ultimatum. Our data comport with the hypothesis that networks can induce reference shifts and thus induce rationality, but can also induce conformity, herd effects and irrationality. Taken together, the two studies reported here comport with the view that reference points are dynamic, shifting quickly, easily, to impact negotiation.

Keywords: negotiation, markets, ultimatum, reference shift