This interdisciplinary proposal combines economic and psychological approaches to decision making. Economic theory makes strong predictions about how people should behave in different choice situations. In the ultimatum game, a situation of interpersonal decision making studied extensively by economists, people's behaviour deviates dramatically from economic theory. We propose three experiments that use a psychological theory (Regret Theory) to understand this "anomaly". The research is innovative in that it is the first application of main stream psychological theory to the ultimatum game, and is the first test of Regret Theory in interpersonal decision making.
The University of Sussex is a centre of excellence on decision making. Dr. Beattie is an internationally respected researcher and has several links with leading British and European psychologists and economists, working on decision making. The applicant (Zeelenberg) will benefit greatly from extending the already existing collaboration with Dr. Beattie.