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Author(s)

Madan Pillutla

J. Keith Murnighan

This paper addresses an anomaly in experimental economics, the rejection of ultimatum offers, and uses a psychological explanation for this essentially economic event. The wounded pride/spite model predicts that informed, knowledgeable respondents may react to small ultimatum offers by perceiving them as unfair, feeling anger, and acting spitefully. Results of a large scale experiment support the model, showing that rejections were most frequent when respondents could evaluate the fairness of their offers and attribute responsibility to offerers. In addition, anger was a better explanation of the rejections than perceptions that the offers were unfair. The discussion addresses the rarely studied but frequently observed emotions that negotiations provoke.
Date Published: 1996
Citations: Pillutla, Madan, J. Keith Murnighan. 1996. Unfairness, anger, and spite: Emotional rejections of ultimatum offers. Organizational Behavior and Human Decision Processes. (3)208-224.