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Abstract

This paper investigates the role of intra- and inter-group effects on the ultimatum game. The paper presents the identity theory as a framework for analyzing intra- and intergroup bargaining behavior on the ultimatum game. An experimental ultimatum game was conducted between participants from Washington and Lee University and Virginia Military Institute. The results presented shows evidence of ultimatum bargaining behavior being influenced by in-group favoritism, along with some evidence of out-group hostility. The results also provide possible implications of the effect of testosterone levels.

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