THE ROLE OF ENVY IN ULTIMATUM GAMES

The behaviour of subjects in ultimatum bargaining experiments is very different from that predicted by standard theory. These 'anomalies' ar e frequently explained by fairness considerations. In this paper we co nsider the possibility that the subjects are simply envious. We derive the implications of envy for the behaviour in ultimatum games and it will be shown that envy is a potential explanation for the most import ant experimental 'anomalies'. This points toward the need to set up ex periments which allow to discriminate between fairness- and envy-motiv ated behaviour.