The ultimatum game captures a simple but essential dynamics of negotiation.

In the favor-asking game, the petitioned party must pay so that the petitioner can gain.

The game yields high uncertainty and emotional risks.

I don’t like to be finessed. – Vartan Gregorian

The ultimatum game has achieved notoriety in behavioral economics and the study of negotiation. It’s a two-stage game. In stage 1, a proposer suggests how an available pot of money, say $10, be shared with a receiver. The receiver then has a choice between accepting the deal and rejecting it; if the latter, no one gets anything. Conventional game theory says the proposer should offer the smallest amount possible, that is, $1 if only single-dollar bills are on the table. The receiver should accept this offer because having any money should be preferred to having none (Güth et al., 1982).

If the reader’s intuition rebels, this is as it should be. Fairness matters. Receivers can punish selfish proposers, and when they do, their loss is smaller than the proposers’ loss. Righteous retribution can feel good (Jackson et al., 2019). The veto-saying receiver teaches the greedy proposer a lesson, and this is not nothing in the hedonic calculus. Proposers are, however, as smart as receivers, and so they can anticipate that very small offers will be rejected (Thielmann & Hilbig, 2014). They therefore tend to offer the smallest amount that they themselves would accept if they were in the receiver’s role. This shakes out to be about $3 to $4.

The ultimatum game is a game where one player seeks to force the other player’s hand. Proposers move in such a way that the receiver’s best response is favorable to the proposer. Now consider a variant of the ultimatum game, an exchange in the domain of favor-asking. Suppose the first mover has entered a situation where much is........

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