BazermanMoore

Perceptions of Fairness 117
include not wanting to accept an unfair allocation and not wanting Mark to benefit from
your acceptance. Alternatively, some may argue that you are doing society as a whole a
favor by punishing Mark for proposing an unfair offer. Any of these possibilities show
that fairness somehow comes into play. If you were unaffected by fairness considerations,
you would accept the $100. After all, $100 is better than nothing. If Vivian offered
to hand you $100, you would be more than likely to take it.
This story points out the importance of understanding the role of fairness and
equality in decision making. Assume that the roles were reversed: You could determine
the allocation and Mark would have the option of accepting or rejecting it. What would
you decide? If you did not factor in fairness considerations, it would be easy to conclude
that the other party would accept the $100 or even less. However, this proposal would
very likely leave you with $0 because Mark would probably reject your offer. In contrast,
a consideration of fairness and equality would lead you to anticipate the likely response
of the other party and consequently improve the expected value that you would receive
out of this transaction by offering the other party significantly more than $100.
This airplane story may seem to be an implausible and contrived situation, but we
play a game with this underlying structure every day. Any time we consider buying
something at a store with a posted price, we are put in the position of deciding whether
to accept the store’s ultimatum offer. The store has chosen a sale price that is, presumably,
above the store’s cost. If you value the item more than what it costs, then you may
choose to buy it. But you are not invited to negotiate with the clerk at the grocery store
about whether you think the celery is really worth what the store is charging. The store
has given you an ultimatum: ‘‘Here is our price. Take it or leave it.’’
A number of researchers have systematically studied how people respond to ultimatums
that are similar to this fictional airplane story (Güth, Schmittberger, &
Schwarze, 1982). In these studies, a proposer divides a known, fixed sum of money any
way he chooses by filling out a form stating, ‘‘I demand X.’’ The responder either accepts
the offer and receives her portion of the money as allocated by the proposer or
rejects the offer, leaving both parties with nothing. Traditional models of rational actors
predict that the proposer will offer the responder only slightly more than zero, and that
the responder will accept any offer greater than zero. The results, however, show that
individuals incorporated fairness considerations into their offers and choices. The average
demand by the proposer was for less than 70 percent of the pie, both for first-time
players and for players repeating the game one week later. In fact, the most frequent
offer from the proposer was an even split of the money. In addition, individuals in the
role of the responder rejected profitable but unequal offers routinely; offers for less
than 20 percent were usually rejected.
People often rely on attaining what they consider to be a fair or justifiable result. As
a result, they are often willing to pay to punish their opponent if he or she asks for too
much. Ochs and Roth (1989) studied a situation in which the responder could reject
the allocation offer of the proposer, then counterpropose an allocation. However, the
pie shrank if the responder rejected the first offer. The researchers found that in such
ultimatum games, 81 percent of rejected offers were followed by disadvantageous
counteroffers in which parties who had rejected the initial offer demanded less than
they had just been offered. Ochs and Roth argue that players’ utilities for fairness may