Computational Economics

, Volume 53, Issue 2, pp 873–900 | Cite as

Experimental Analysis of Corporate Wage Negotiations Based on the Ultimatum Game: A New Approach Using a Combination of Laboratory and fMRI Experiments

  • Hidetoshi YamajiEmail author
  • Masatoshi Gotoh
  • Yoshinori Yamakawa


Workers who have limited wealth are also at a disadvantage in terms of income distribution. In accounting this brings to mind the way in which managers may limit wages by manipulating accounting information when negotiating with workers. While researchers have investigated whether or not managers manipulate information to keep workers’ wages low, they have rarely been able to produce sufficient empirical evidence to support their arguments. So we seek to bridge this gap between the present conditions and academic research. Focusing on the recent tendency for labor-management negotiations to take the form of individual bargaining between managers and workers, we conduct experiments of psychology and perform neuro-experiments using fMRI. It was found that a trend existed where managers who had a high level of empathy and would normally be expected to recognize workers’ difficult circumstances, conversely tended to compel workers to accept unfavorable outcomes.


Extremely unfair corporate income distribution Repeated ultimatum game Psychological behavior experiments fMRI Neurological experiments Empathy 

JEL Classification

M410 M540 



The authors thank Kouichi Hioki for his contribution to making the computer program of experiment. They acknowledge the financial support for this research which was provided by the Grant-in-Aid for Scientific Research (C) (2015–2017) headed by Hidetoshi Yamaji.


  1. Amernic, J., & Craig, R. (2005). Roles and social construction of accounting in industrial relations. The Journal of Industrial Relations, 47(1), 77–92.Google Scholar
  2. Bolton, G. E., & Ockenfels, A. (2000). ERC: A theory of equity, reciprocity and competition. American Economic Review, 90(2000), 166–193.Google Scholar
  3. Bova, F. (2013). Labor unions and management’s incentive to signal a negative outlook. Contemp Account Res, 30(1), 14–41.Google Scholar
  4. Camerer, C. F. (2011). Behavioral game theory: Experiments in strategic interaction. Princeton: Princeton University Press.Google Scholar
  5. Camerer, C. F., Loewenstein, G., & Prelec, D. (2005). Neuroeconomics: How neuroscience can inform economics. J Econ Lit, 43(2005), 9–64.Google Scholar
  6. Chaness, G., & Gneezy, U. (2008). Whta’s in a name? Anonymity and social distance in dictator and ultimatum games. Journal of Economic Behavior and Organization, 68(1), 29–35.Google Scholar
  7. Cullinan, C. P., & Knoblett, J. A. (1994). Unionization and accounting policy choices: An empirical examination. Journal of Accounting and Public Policy, 13, 49–78.Google Scholar
  8. DeAngelo, H., & DeAngelo, L. (1991). Union negotiations and corporate policy: A study of labor concessions in the domestic steel industry during the 1980s. Journal of Financial Economics, 30(1), 3–43.Google Scholar
  9. Farber, D. B., Hsieh, H.-Y., Jung, B., & Yi, H. (2012). The impact of non-financial stakeholders on accounting conservatism: The case of labor unions, January 2012 Electronic copy
  10. Fehr, E., & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. Quarterly Journal of Economics, 114(1999), 817–868.Google Scholar
  11. Hilary, G. (2006). Organized labor and information asymmetry in the financial markets. Review of Accounting Studies, 11(4), 525–48.Google Scholar
  12. Kahneman, D., Knetsch, J. L., & Thaler, R. (1986). Fairness as a constraint on profit seeking: Entitlements in the market. The American Economic Review, 76(4), 728–741.Google Scholar
  13. Liberty, S., & Zimmerman, J. (1986). Labor union negotiations and accounting choice. The Accounting Review, 61(4), 692–712.Google Scholar
  14. Lunawat, R. (2013). An experimental investigation of reputation effects of disclosure in an investment/trust game. Journal of Economic Behavior & Organization, 94, 130–144.Google Scholar
  15. Mautz, R., & Richardson, F. (1992). Employer financial information and wage bargaining: Issues and evidence. Labor Studies Journal, 17(3), 35–52.Google Scholar
  16. Ministry of Health, Labour and Welfare. (2011). Survey on labour disputes.Google Scholar
  17. Ministry of Health, Labour and Welfare. (2013). Basic survey on labour unions.Google Scholar
  18. Osumi, T., Nakao, T., Kasuya, Y., Shinoda, J., Yamada, J., & Ohira, H. (2010). A role of the anterior insula in altruistic punishment: An FMRI study using the ultimatum game and the dictator game. International Journal of Psychophysiology, 77, 342.Google Scholar
  19. Page, K., & Nowak, M. A. (2002). Empathy leads to fairness. Bulletin of Mathematical Biology, 64, 1101–1116.Google Scholar
  20. Piketty, P. (2013). Le Capital au XXXIe siecle, Seuil.Google Scholar
  21. Roth, A. E., Prasnikar, V., Fujiwara, M. O., & Zamir, S. (1991). Bargaining and market behavior in Jerusalem, Ljubljana, Pittsburgh and Tokyo: An experimental study. The American Economic Review, 81(5), 1068–1095.Google Scholar
  22. Sanfey, A. G., Rilling, J. K., Aaronson, J. A., Nystrom, Leigh E., & Cohen, J. D. (2003). The neural basis of economic decision making: An fMRI investigation of the ultimatum game. Science, 300(5626), 1755–58.Google Scholar
  23. Singer, T. et al. (2006). Empathic neural responses are modulated by the perceived fairness of others. Nature, 439 26, January.Google Scholar
  24. Smith, V. (2003). Constructivist and ecological rationality in economics. The American Economic Review, 93(3), 465–508.Google Scholar
  25. Statistics Bureau (Japan). (2013). Labour force survey.Google Scholar
  26. Stiglitz, J. E. (2012). The price of inequality: How today’s divided society endangers our future. New York: W. W. Norton and CompanyGoogle Scholar
  27. Suzuki, Y., & Kino, K. (2008). Development of the Multidimensional Empathy Scale (MES): Focusing on the distinction between self- and other-orientation. Japanese Journal of Educational Psychology, 56(2008), 487–497.Google Scholar
  28. Takahashi, H., Takano, H., Camerere, C. F., Ideno, T., Okubo, S., Matsui, H., Tamari, Y., Takemura, K., Arakawa, R., Kodaka, F., Yamada, M., Eguchi, Y., Murai, T., Okubo, Y., Katoh, M., Ito, H., & Suhara, T. (2012). Honesty mediates the relationship between serotonin and reaction to unfairness. PNAS Early Edition January 19, 2012.Google Scholar
  29. Yamaji, H. (1986). Collective bargaining and accounting disclosure: An inquiry into the changes in accounting policy. International Journal of Accounting Research and Education, 22(1), 11–23.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  • Hidetoshi Yamaji
    • 1
    Email author
  • Masatoshi Gotoh
    • 2
  • Yoshinori Yamakawa
    • 3
  1. 1.The Research Institute for Economics and Business AdministrationKobe UniversityKobeJapan
  2. 2.Graduate School of Business AdministrationKobe UniversityKobeJapan
  3. 3.NTT Data Institute of Management Consulting, Inc.TokyoJapan

Personalised recommendations