Unfairness, Anger, and Spite: Emotional Rejections of Ultimatum Offers

Abstract

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.