Fear and guilt in proposers:Using emotions to explain offers in ultimatum bargaining

We argue that offers in bargaining are guided by the emotions that proposers anticipate when contemplating their offers. In particular, we reason that positive offers may be driven by fear and guilt, where fear is more related to the perceived consequences of having one's offer rejected, and guilt is more related to concerns for the opponents' outcomes. Two studies on ultimatum bargaining corroborate this view. In Study 1, we used two well-documented manipulations to affect the consequences of having one's offer rejected and the initial entitlements of one's opponent. Both factors affected offers: Offers were higher when the consequences of having one's offer rejected were lower, and when the initial entitlements of one's opponent were higher. In agreement with our predictions, the former effect was mediated by anticipated fear and the latter by anticipated guilt. In Study 2, we directly manipulated both mediators. The findings further corroborate our reasoning by showing that both feelings also have a direct effect on ultimatum offers. These findings highlight the potential contribution of studying specific emotions in bargaining behavior. Copyright (C) 2010 John Wiley & Sons, Ltd