Let me sleep on it: delay reduces rejection rates in ultimatum games

We show that delaying acceptance decisions in the Ultimatum Game drastically increases acceptance rates of low offers. While in standard treatments without delay less than 20 % of low offers are accepted, these numbers increase to around 65-75 % as we delay the acceptance decisions by around 10 minutes. Our findings provide precise evidence for familiar notions such as ’sleeping on it ’ and show that there may be a good reason why public administrations often communicate bad news on Friday afternoons. They shed new light on recent evidence in Neuroscience on brain activation after receiving bad news and raise questions about the extent to which decisions reveal the preferences of a decision-maker. There is a common implicit understanding that delaying a reaction to bad news may lead to more moderate reactions and hence more prudent economic decisions. This is often alluded to when people say ”Let me sleep on it before I make a decision”. Public administrations sometimes try to make use of this by communicating bad news on Friday afternoons such that people cannot react until Monday morning. In this study we show that ”having a break ” can be enough. Delaying decisions by only 10 minutes after receiving bad news drastically changes human behavior in a controlled laboratory environment. We study the effect of delaying decisions in the context of the so called Ultimatum Game. In this gam